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Smaller IT budgets could mean opportunities for tech companies

2/24/2012

As the battered U.S. economy slowly recovers, IT departments continue to face budget crunches. A recent Campus Technology article described how this poses both challenges and opportunities for tech companies.

Like other organizations, colleges and universities have had to balance increased computing needs with tighter budgets in recent years. Consequently, university IT departments have sought to renegotiate their software contracts and other agreements with tech vendors. Louise Finn, the CIO at Loyola University Maryland, told Campus Technology that vendors have been receptive to renegotiating terms. Furthermore, given that tech companies are also feeling the pressure of a struggling economy, many have been willing to cut good deals.

While tech companies might feel pressure to accommodate large or long-time clients in IT contract renegotiations, these companies also stand to benefit as organizations look to cut costs by outsourcing work.

Phil Pena, the CIO of Morton College, said that it was more cost-effective to contract with an outside provider to install a new enterprise resource planning system. The company that won the ERP contract has now been retained by the school to do network and server administration and provide tech support, Pena told the source.

As IT departments save money by renegotiating contracts and strategically outsourcing, they will have more funds in their coffers to license new software. This is what happened recently at Tufts University. The school announced it has acquired a one-year contract for an online survey tool that will be accessible to students and faculty.