Survey of CIOs suggests wallets are opening

IDG News Service - Corporate investments in telecommunications equipment may be starting to bounce back on the strength of voice over IP ( VOIP), according to an October survey by CIO magazine.
In the latest installment of the monthly survey, 37.2% of top IT executives responding said they plan to increase their spending on telecommunications gear over the next 12 months, the highest percentage giving that answer since August 2001. Meanwhile, 17.4% said they expect to cut spending on telecommunications gear over the next 12 months and 43.8% expect to keep it the same.
Recent conversations with CIOs have indicated that a big factor in the increased spending will be VOIP technology, which requires some investment in new equipment but is seen as a money-saver over time, said Gary Beach, group publisher of CIO magazine. VOIP gear converts voice calls into IP data packets and sends them over the Internet or a private IP network, so a company can bypass carrier charges for traditional long-distance voice circuits. Maximizing efficiency and productivity are the biggest issues for most CIOs, and they see VOIP as a good tool for achieving those goals, Beach said.
Spending increases won't stop with telecommunications, according to the survey. On average, the 243 executives who responded to the poll -- 95% of whom are from North America -- said they expect IT spending at their companies to grow 6% over the next 12 months. That's up from 5.9% in the prior month's survey and is the most positive response to an October survey since 2000, Beach said.
Combined with other results, the response bodes well for upcoming IT spending, he said. "What we're suggesting is that ... technology spending is in an early stage of recovery. Our take is that the turn happened in June of this year."
Web services may be central to the increased spending, Beach said. After a few bad economic years, companies may finally be able to follow through on plans they had made around 1999 to expand their private intranets out onto the Internet in order to link with partners and customers to carry out transactions electronically, he said. Today the technology is more mature, the standards more robust and the users more sophisticated.
Another hopeful sign for spending is a backlog of IT projects that are yet to be completed. In August, the last time a question on backlogs was included in the survey, 47.1% of respondents said there was a "significant" backlog of projects at their companies. More than three quarters of those respondents