IT spending on road to recovery

IT spending will start to recover in 2004, according to three top analyst companies, Gartner, Forrester Research and Meta Group.

Gartner says budgets will begin to rise early next year, and will “accelerate moderately through 2005 and 2006”. Without putting an exact number on its forecast, the group says there will be a return to strong “single digit growth”, and that some sectors will fare better than others.

However, the recovery has not properly kicked in because many CIOs are not spending all of their budgets, according to Gartner’s figures. Its Technology Demand Index for October, based on reports from buyers worldwide, was 85 – meaning that companies only spent that percentage of their monthly budgets.

Forrester Research, meanwhile, expects US IT spending to grow by 4% in 2004. However, this figure includes consumer purchasing; CIOs, according to Forrester, are only expecting budget increases of 1.7%.

Forrester’s figures, based on 800 decision-makers in North America, identify ‘risk mitigation’ as the top budget priority – this includes upgrades to security and disaster recovery systems.

The Meta Group, in its IT Benchmark Report, also forecasts an increase in spending for the year, although it says most organisations already have sufficient capacity and infrastructure. Spending will focus on security, and integrating and extending new applications, it says.

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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