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Corporate IT spending predicted to stay flat

Stock markets are rising and consumer confidence has jumped in recent months, but these developments have had little effect on...

Stock markets are rising and consumer confidence has jumped in recent months, but these developments have had little effect on corporate IT spending plans.

Most North American companies surveyed separately by Forrester Research and Meta Group said they were holding steady with their IT budgets for the year, around a third of the respondents said they intended to shrink their tech spending.

The survey results  led Forrester to revise its 2003 IT spending forecast downward from the 1.9% average budget increase it projected in December to a mere 1.3% rise. For instance, 33% of surveyed companies in both the manufacturing and technology sectors now plan to "pull back the reins" and spend below their initial budgets for the full year, said Forrester analyst Tom Pohlmann.

"If you look at IT spending from a Buy, Hold or Sell perspective right now, most companies are taking a Hold approach," said Howard Rubin, executive vice president at Meta.

In general, companies are spending more on IT in areas such as web services and server consolidations, one area where companies "are investing money to save money", said Rubin. Meanwhile, spending is shrinking on technologies such as ERP systems, he said.

The Meta study, completed last month and involving 500 companies, found that 41% of the respondents planned to leave their IT budgets unchanged. The rest were almost evenly split: 30% planned to cut their budgets, while 29% were planning increases in IT spending, Rubin said.

Thomas Hoffman writes for Computerworld

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