IT suppliers are so far managing to withstand the effects of the credit crunch, a report suggests.

New research from Ernst & Young reveals almost half as many UK technology suppliers issued profit warnings in the last quarter than in the first three months of the year, according to ComputerWeekly.com.

The website says IT suppliers are showing a resilient performance because businesses are continuing to invest in their IT services.

It says the Federation of Small Businesses has indicated that its members are actually now spending higher amounts of money on their IT services, with an aim to "depend less on manual processes, to reduce labour costs".

Justin Speake, chief executive at analyst firm Bloor, told the news provider that firms are not abandoning any major projects, but rather are doing business "with more vigour" in view of the slowdown.

Last month, the Daily Telegraph reported that computing giants Microsoft and Google are not immune from the economic downturn.

It said both firms had failed to meet profit expectations and that Microsoft's chief financial officer Chris Liddell had acknowledged his company is facing a "tough environment".


According to a recent survey by Connect, the two biggest IT headaches for businesses were 'everyday hassles with IT' (37 per cent) and 'security concerns' (32 per cent) In a recent survey of SMEs for Connect, the two most important benefits of outsourcing were 'guaranteed response times' and 'allowing in-house IT staff to concentrate on more strategic issues'