(CIOZone) By Ronald Fink

The widespread trend among U.S. companies to outsource their IT operations appears to be losing steam, according to a survey by the CIOZone Research Network.

The survey of 195 corporate IT executives found that 24.6 percent said that outsourcing projects would be the item most negatively affected until their budgets normalized. And almost 40 percent said they did not expect budgets to return to normal until next June at the earliest.

The percentage of respondents who cited outsourcing as Job #1 on their not-to-do lists exceeded those who expected to cut back on networking efforts, the next biggest target for IT spending cuts, by six percentage points.

The findings were even more pronounced for large companies, with 22 of the 51 respondents who said they would first direct the budget axe at outsourcing hailing from enterprises with $1 billion or more in annual revenues. Eight of those 22 enterprises indicated budgets would decrease year-over-year by 36 percent or more.

Among other survey results, one-third of respondents said they did not expect to undertake any new initiatives by the end of this year. Of those who did indicate they will start a new project between now and yearend, storage was the most frequently selected area, with 18 percent, leading those citing servers, information security and networking by a slim margin. Outsourcing came in last, with just under 10 percent.

Perhaps not coincidentally, Hewlett-Packard reported Tuesday that it was considering selling or shutting down parts of its outsourcing business after mounting an effort to challenge rival IBM with it.

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