Worldwide IT budget growth is projected to increase 2.7 percent this year over 2005, according to Stamford, Conn.-based Gartner. "When you're below 3 percent and you factor in the inflation rate, that means IT budgets are essentially flat," said Ken McGee, a Gartner analyst who spoke with Computerworld at the Gartner Symposium/ITxpo in San Francisco.

By Gartner's calculations, 2006 will be the fourth year in a row that global IT budgets failed to outpace inflation.

The gap between business growth and IT budget growth is reflected across all major industries, though it's more obvious in some, according to Gartner. Manufacturing companies are expected to see revenue increases of 4.5 percent this year; their IT budgets, however, are only expected to grow 2.8 percent. The same trend is expected at high-tech firms, which are forecast to boost sales 6.7 percent this year, while their internal IT budgets will be capped at just 2.5 percent more than last year.

Some of the reasons for stagnant IT budgets are good: Technology products are "delivering better bang for your buck," McGee said, in part because of increasing use of open-source software. He downplayed savings from outsourcing and offshoring.

But other reasons are less positive for IT departments. Business units within corporations are bypassing "IT gurus" to fund tech purchases themselves. Moreover, postbubble regulations are "sapping" a lot of IT dollars and energy. Mostly, McGee said, many IT departments are still keeping a low profile after their perceived wastefulness during the dot-com boom.