Update: Studies diverge on IT spending in 2003
IDG News Service - Two studies released yesterday portray divergent views of where IT spending is headed in 2003.
Research by market analysis company Aberdeen Group Inc. predicted that worldwide IT spending will grow 4% this year, rebounding from growth of just 1% in 2002, according to
That level of growth will continue through 2006, with little chance of a return to the double-figure percentage growth rates of the late 1990s, the company said in its report.
But a separate study showed a decrease in IT spending for 2003.
The Goldman Sachs Group Inc., in a report also released yesterday, predicted a 1% drop in IT spending in 2003, contrasting with other more optimistic predictions from technology analyst firms.
Goldman regularly surveys a panel of 100 IT managers who influence technology decisions at top companies worldwide. The most recent results show a mixed spectrum of expectations for the coming year. The number of managers expecting declines in their IT spending increased to 37% in December, as opposed to 23% who felt that way in October. A weighted average of all respondents indicated a 1% drop in IT spending, compared to a weighted-average prediction of 2% to 3% growth in October, Goldman said.
The magnitude of the pessimism surprised the New York firm, which said a 3% swing in the outlook from October to December was unusual.
And the gloom won't lift for awhile, at least according to Goldman's survey. It will take at least a year for IT spending increases to accelerate, according to 43% of Goldman's panel. And 63% of the respondents said only as their company's revenue and profitability increase will they be able to reinvest some of the profits in IT.
When spending does resume, it will likely grow about 5% per year, according to a weighted-average prediction from the IT managers. As recently as last June, almost half of Goldman's panel thought their long-term IT spending would grow 6% or 7%, but that number fell in the December survey.
Security products and wireless LANs will dominate what remains of the Goldman panel's IT budgets, according to the survey results. Other priorities include enterprise portal software and upgrades of Windows operating systems from Microsoft Corp., Goldman said.
Despite the hype behind Linux-based servers, Goldman's panel is losing interest in the technology, although it still ranks them above Windows or Unix-based servers. The group is also moving hardware upgrades down on their priority list.
According to the Aberdeen research, at the moment, there are no compelling reasons for user organizations to spend heavily on technology -- whether on new technology or on upgrades
- Meet Business Demands and Drive IT Innovation Your IT organization plays a strategic role in business operations. What new solutions and offerings could you create if you had an agile,...
- British Airways Case Study British Airways increases scalability, reliability, flexibility and performance while building on its IT infrastructure using Red Hat Enterprise Virtualization.
- 3 Keys to Secure BYOD Deployment The new Bring-Your-Own-Device (BYOD) environment presents challenges for IT managers and business leaders. This paper discusses how IT managers can address those challenges,...
- Creating a Video Collaboration Strategy: Four Mistakes Mid-Market Companies Make and How to Avoid Them This Cisco-sponsored whitepaper from AVI-SPL shares key insights from Cisco's and AVI-SPL's teams of video collaboration integration experts gained through hundreds of deployments...
- Live Webcast How to serve up a Grand Slam with a scalable IT Infrastructure for cloud, big data and advanced analytics Register today to attend this webcast, and see examples of how The U.S. Tennis Association, Wimbledon and U.S. Golf Association are using the...
- Top 4 Digital Signage Fails Join RMG Networks for a look at four of the most common reasons digital signage fails in corporate businesses. Learn about strategies to...
- Symantec NetBackup Appliances: Key Factors in Modernizing Backup and Recovery This white paper outlines a structured approach to assessing the advantages and requirements of the PBBA model, and in particular the unique capabilities...