Study: Security still top IT spending priority

IDG News Service - A recent survey of 100 IT executives predicts that IT spending will decrease slightly in 2006 as more businesses worry about global economic conditions, but security software and enterprise IT upgrades remain top concerns.

Macroeconomic factors such as high oil prices and a devastating hurricane season in the U.S. have caused 40% of the executives surveyed by Goldman, Sachs & Co. to consider reducing their 2006 IT budgets, according to survey results released Friday. Most executives, 52%, believe IT spending will be unchanged in 2006.

Security software has been a long-running priority among the executives on Goldman's survey panel, and nothing has changed that mind-set based on the current results. Spending on antivirus products has eased up after a flurry of activity, but CIOs continue to focus on improving security in areas like identity management and regulatory compliance, the survey said.

Other enterprise software priorities include enterprise resource management and customer relationship management systems, with CIOs upgrading those two categories to top priorities. When Goldman polled its panel in April, ERP and CRM software were considered only medium priorities.

Among enterprise software vendors, VMware Inc. and SAP AG were the two most cited companies receiving a larger percentage of the respondents' IT budgets. Virtualization technologies are a hot topic this year as Intel Corp. and Advanced Micro Devices Inc. prepare chips that improve the performance of virtualization software. Respondents listed Novell Inc. and Computer Associates International Inc. as receiving less of their IT budgets.

When it comes to choosing hardware for their new software, IT executives listed servers using Microsoft Corp.'s Windows operating system as a top priority, an increase in the number of executives who said that in the April survey. Unix servers also are getting more attention based on the latest survey, but they are considered only a medium priority among Goldman's respondents.

Dell Inc. and IBM are receiving larger shares of IT budgets, according to the panel. Goldman suggested that given Dell's financial results from the past two quarters, aggressive discounts may have played a role in Dell's performance among respondents. Hewlett-Packard Co. is losing its share of respondents' IT budgets, but Goldman expects the company's performance to improve over the next year.

Dell also is gaining share in the PC portion of respondents' IT budgets, while HP is losing share. Goldman attributed HP's performance to increased discipline about the markets in which it participates. Lenovo Group Ltd. neither gained nor lost share among the survey respondents. Lenovo earlier this year completed its acquisition of IBM's PCbusiness.

On the sensitive topic of outsourcing, 24% said they expect their interest in paying someone else to manage their data centers or desktops to increase. With economic conditions on the minds of IT executives, reducing their costs by outsourcing these functions is expected to become more popular, according to Goldman.

Fifty-three percent of Goldman's survey respondents hold the title of CIO, while 22% are vice presidents of IT or IS and 15% are directors of MIS or IT. Eighty-two percent of the respondents work for companies that have yearly revenue of $500 million or more, and 52% of the companies have more than 10,000 employees worldwide.