There is one area of information technology that has flourished during the current recession – prediction. Over the past year or so, it seems that not a month passes without one analyst group or another (or indeed several) pitching their ideas on when IT spending patterns are likely to see an upturn.
The quarterly CIO spending survey from investment bank Merrill Lynch is the latest prediction to hit industry desks. And the news, apparently, is positive.
According to a survey of CIOs in the UK and US by Merrill Lynch, almost one third of respondents expect to increase their spending on technology from mid-2003. However, Merrill warns that a meaningful recovery is not likely to occur until 2004.
Furthermore, spending for the remainder of 2002 is likely to remain flat – only 4% of the CIOs Merrill interviewed say their spending will increase during the fourth quarter of 2002.
CIOs cite a number of factors for a loosening of their purse strings in mid-2003. These include the need to replace ageing equipment and an increasing backlog of user requests.
The survey also highlighted CIOs’ changing perceptions of large technology vendors. Two-thirds said software giant Microsoft was becoming more important to them. Merrill said this was due to Microsoft’s new licensing agreements, users standardising on Microsoft applications and upgrading to Windows XP. Only 16% of CIOs said Microsoft was becoming less important to their organisations.
In contrast, a greater number of CIOs stated that other major technology suppliers, including Hewlett-Packard (HP), Cisco Systems, Sun Microsystems, EMC and SAP, are becoming less important to them.
More than one-third said storage giant EMC was less important, while a similar number offered the same opinion about systems giant HP. “Users are not sure the merger [with Compaq] differentiates HP or don’t consider HP their standard platform,” the report stated.
Overwhelmingly, concludes Merrill, managers recognise more than ever the importance of technology investment for competitive advantage. Given the volume of research surrounding technology spending that hits their desks each day, this is a point they could hardly miss.