Chief information officers have predicted that their IT
budgets will grow by around 5.6% over the next year, up from the
3.3% projected in May.
The CIOs, who were surveyed by CIO magazine's Tech Poll last
month, said their spending plans were starting to pick up,
according to the June results of CIO's monthly Tech Poll.
Security software remained the strongest of the eight IT sectors
covered by the poll, with 54.4% of respondents planning to increase
spending.
Outsourced IT services was the weakest area, with 27.7% saying
they would increase spending but 27.1% decreasing the amount they
spent.
Telecom equipment also attracted low interest, with 28.9%
increasing their spend and 22.5% planning reductions.
The survey panel includes 5,000 executives, primarily CIOs. In
June, 94% were from North America, with large enterprises
representing 20% of the results. Respondents work in a wide
assortment of industries, including manufacturing, finance,
government, healthcare and technology services.
Projections on when IT spending will significantly turn around
were hazy, with 30.3% opting for "beyond 2003".
Eighteen percent said it has already picked up, while 26.1%
forecast an industry-wide pickup for sometime in the last half of
2003.
When asked to compare their expected IT spending against that of
the previous quarter, 7.1% said their spending would be
"significantly higher", the strongest response received for that
question so far this year. Meanwhile, a quarter said spending would
be "higher".
The group of respondents anticipating "lower" or "significantly
lower" spending dropped to 15.8%.
The optimism has been attributed to projected spending increases
as a result of a new US tax plan which allows small businesses to
write off $100,000 in capital equipment investments. That change
has motivated businesses that had previously frozen their tech
spending, he said.
Respondents cited weak profits as the top obstacle to spending
growth. Other factors mentioned included tight financial conditions
and the sufficiency of existing capacity.
Stacy Cowley writes for IDG News
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