Chief information officers expect their budgets to grow
by 7.4% in the next year - a slight fall on the 8.9% they
anticipated when polled in August.
US magazine CIO surveyed about 250 chief information officers in
September for its monthly Tech Pol. Although the month-on-month
figures show a slight fall, the forecast is still 25% stronger than
CIOs projected in the same period last year.
"What's driving [this] is that 62% of CIOs are telling us that
their firms have a significant application backlog," said Gary
Beach, group publisher at CIO magazine.
When asked about spending in eight specific IT sectors, the
average number of CIOs surveyed who planned to increase spending
fell to 43.7% in September, down from 46.7% in August.
However, spending in some sectors, such as security and storage,
remained hot, Beach said.
In fact, 65.1% of the CIOs surveyed plan to increase spending on
security, up from 61.3% in August; 53.4% plan to spend more on
storage systems, up just slightly from 53.1% in August.
Other sectors did not fare as well. "The first stop on the
spending train [is] data networking and telecommunications," Beach
said.
According to the survey, 42% of respondents plan to increase
spending on data networking equipment, down from 49.4% who said
that in August. And only 38.6% said they plan to increase spending
on telecoms equipment, down from 42.8% in August.
"Software applications and software infrastructure will lag
[behind] other product categories in the next 12 to 18 months
because businesses are going to be more interested in focusing on
building and enhancing and upgrading their network infrastructure -
that's going to be job one," Beach said.
He expressed surprise at the slowdown in the computer hardware
sector in September. "Computer hardware has been having a pretty
good run, and for whatever reason, this month it cooled off
compared to the other seven product categories."
He suggested that because many businesses have already upgraded
to Windows XP, and Microsoft is not expected to release Longhorn
until at least sometime in 2006, CIOs may not feel they need to
upgrade their hardware.
"Perhaps the Y2K refresh cycle is seeing its waning day. But
we'll have to wait and see - it's just one month," Beach said.
The survey indicates that the internet is coming into its own as
a business tool. "[It] is no longer a science project for CEOs,"
Beach said. "The age of e-commerce might be just about to dawn.
"If you look at our data, we estimate about 18% of all business,
according to our poll respondents, is going to be driven by the
internet next year in terms of driving sales or driving
procurement. So this is not an experiment any more - it's becoming
a really serious business tool."
Each month, CIO magazine surveys a panel of IT executives on
current and future IT spending and other IT issues. The survey is
done in partnership with Ed Yardeni, chief investment strategist at
Oak Associates and Deutsche Bank Securities.
The latest poll was conducted between 9 and 16 September: 253 IT
executives responded to the survey, 19% of the responses came from
executives at companies with more than 5,000 employees.
Linda Rosencrance writes for Computerworld