There are plenty of predictions that corporate IT spending will shrink next year.

So to see what's going on in the real world, Computerworld interviewed two enterprise IT buyers who gave very different expectations on how much they will be tightening their belts in 2009. One is a Louisiana company that runs hospital emergency rooms whose CIO must slash his IT budget. The other is a German engineering services firm for the auto industry whose managing director envisions no downturn-related cutbacks, despite the problems with his predominantly Detroit-based clientele.

Health care provider tries to make cutbacks less painful

When Douglas Menefee became CIO of the Schumacher Group three years ago, he was given carte blanche to upgrade or replace every enterprise system used by the 14-year-old, 750-employee Lafayette, La. firm, which provides staffing and management services for hospital emergency rooms.

Times have changed. As reports of the U.S. economy spiraling downward increased, Menefee was told by corporate higher-ups several months ago that he would likely have to slash his 2009 IT budget in half.

After fierce negotiation, they reached a compromise.

"They said, 'OK, Doug, we'll settle on cutting the budget by 20%, but we expect you to still deliver the same amount of value,'" Menefee said.

To meet that goal, Menefee first evaluated all of Schumacher's ongoing projects. Smaller ones, especially those with an immediate ROI, were bumped ahead, while large projects were scaled back or delayed. For instance, Menefee is continuing to put off upgrading Schumacher's PeopleSoft financials software.

Projects requiring a lot of expensive consulting and integration work are being especially targeted.

"We are absolutely cutting strings with consultants," he said. "Rather than sending them 100% of the work, we are sending them 50 to 75 percent and taking more ownership inside."

Having bought servers this year, Menefee plans to put off buying any data center hardware next year apart from replacing some "end of life" Cisco Systems Inc. networking gear. To increase efficiency on the 140 servers Schumacher runs, Menefee expects to use more virtualization next year.

As for storage, "I will do anything I can to avoid buying another SAN in 2009," he said.

Menefee said his suppliers claim business is still good. "Today, vendors are telling us that they are seeing the decision-making process extend another two to three months, but they are still seeing deals go through," he said. As a result, "they still have a target dollar amount they think they can get from you."

Fortunately for Schumacher, most of its IT contracts don't come up for renewal until next year when Menefee expects vendors to be more flexible and realistic in making deals.

Menefee also plans to take a close look at his enterprise agreements with Microsoft Corp. and see if it makes more sense to move back to a "Select" license. Enterprise agreements are Microsoft's premium license that offers users the most features, but at the highest cost. Select licenses omit certain features but can be much cheaper for less-demanding users.

Microsoft runs on all of Schumacher's desktops, as well as many of its servers, such as its 7TB billing system, which uses a SQL Server data warehouse.

Schumacher upgraded to an enterprise agreement from a Select license three years ago. But Menefee says constant re-evaluation makes sense, due to Microsoft's constantly changing licensing and product release dates.

Schumacher's other main vendor is Salesforce.com.

"We get a huge return on investment from Salesforce. It drives all of our systems," he said. "We don't have an on-premises ERP system, we just take Salesforce.com as far as it can go."

Indeed, half of the software Schumacher uses is delivered as a service. Because of that, Schumacher's vendor list includes many smaller startups. Menefee is taking a close look at the "depth and financial stability" of those vendors, especially "if there is a chance that their outside investment could be pulled," leaving