The Technology Spending Landscape

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Two reports show conflicting views of IT spending in the next six months. The Aberdeen Group surveyed CIOs and other IT purchasing decision makers and found that technology budgets are expected to increase by an average of 3.4 percent in the next six to 12 months. A similar study conducted by the Aberdeen Group in March showed an average increase of 2.7 percent in the next six to 12 months. But the Wendover-Global Insight IT Spending Index shows that IT spending will remain flat until the end of the year.

 

 

 

Hugh Bishop, senior vice president and author of Aberdeen’s report, “Technology Forecasting Consortium: 2003 User Buying Intentions – Update,” said that the Aberdeen survey shows IT buyers are starting to spend money on technology that allows them to take advantage of existing business opportunities through better service. 

 

 

 

Larry Dillon, CEO of Wendover Corp., takes a more conservative view, saying that there is a “cautious trickle, not the bold flow others predict.” Wendover’s report is based on a survey of 30,000 IT decision-makers that covered planned IT initiatives. Dillon said that these decision-makers had asked for fewer proposals for planned initiatives, meaning these companies plan to make fewer discretionary IT purchases.

 

 

 

The Aberdeen Group survey said the five application categories covered by the expected increase in spending include content/document management applications, customer service and support, employee self-service, help desk and field services applications, and e-mail/messaging solutions. Aberdeen also found that the top three technology infrastructure solutions are security gateways and services, network and systems management and application development tools.

 

 

 

But Wendover’s findings diverge from this conclusion. Wendover found that the number of planned network services and network equipment projects declined 40 percent over the past two quarters, and are expected to face further declines. In addition, Wendover reported that the number of firewall protection and disaster recovery projects planned have been declining to all-time lows over the past two quarters, after reaching highs following the attacks on Sept. 11. Also down in Wendover’s report is spending on accounting and finance software projects.

 

 

 

Wendover reported that customer relationship management (CRM), enterprise resource planning (ERP) and purchasing software projects are all seeing growth. CRM projects grew by 33 percent in the second quarter. While ERP has faced a long decline, the number of planned projects increased by 57 percent in the second quarter. And this is in spite of shakeups in this sector, with PeopleSoft acquiring J.D. Edwards, and Oracle announcing its intent to purchase PeopleSoft.

 

 

 

To find out more about the Aberdeen report, go to http://www.aberdeen.com. For more on Wendover’s report, see http://www.itforecast.com.

Emily Hollis is associate editor for Certification Magazine. She can be reached at ehollis@certmag.com. 

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