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IT debt to hit one trillion dollars by 2015By Tom Manners 27 September 2010 | Categories: news
Global IT debt will total approximately $500 billion in 2010, with the potential to rise to $1 trillion by 2015, according to research firm Gartner.
Gartner defines IT debt as the cost of clearing the backlog of maintenance that would be required to bring the corporate applications portfolio to a fully supported current release state.
"Over the last decade, CIOs have frequently seen IT budgets held tight or even reduced. The reaction has been to still deliver quality of service for operational services and to use any potential project spend to deliver new functionality to the rest of the business," said Andy Kyte, vice president and Gartner fellow.
"The bulk of the budget cut has fallen disproportionately on maintenance activities; the upgrades that keep the application portfolio up-to-date and fully supported. There is little problem if this is done in one year, or even in two years, but year after year of deferred maintenance means that the application portfolio risks getting dangerously out of date."
"The issue is not just that maintenance keeps on getting deferred, it is that the lack of an application inventory and the absence of a structured review process for the application portfolio. This means the IT management team is simply never aware of the true scale of the problem," Kyte said. "This problem, hidden from sight, is getting bigger every year and more difficult to deal with every year."
As businesses continue to invest in business value-added projects that add more functionality and complexity into the existing and aging portfolio, the size of the IT debt grows as well, because the additional functionality and complexity will need to be maintained and upgraded to a more-reliable state at some point in the future.
"A modern enterprise or public sector organization is likely to be critically dependent on a number of business applications. Each one is at a particular point in a complex life cycle; each one is slowly but inevitably diverging from its ideal state toward a suboptimal state, and potentially toward obsolescence or failure," said Kyte.
"While it is true that there has never been an IT organization without a backlog of maintenance activity, the scale of the problem is significantly greater than it has ever been."
At present it is unclear how this growing IT debt might affect companies in the long run but it seems unlikely that these firms will be able to steer clear of dealing with the issue for much longer.
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