Current investment not enough to ignite IT market

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Current investment not enough to ignite IT market

Companies will increase investment in IT next year, but only by the minimum required to keep the business and department ticking over, according to Gartner.

The analyst firm predicts a 4% spending increase by UK companies in 2006. While this is an improvement from the 2.5% increase this year, it is not enough to have a significant effect on the industry.

"The survey results show a cautious and constrained picture of IT spending in Europe,” says Roger Fulton, vice-president and analyst at Gartner. “It is not the spending recovery hoped for by the IT community."

The highest growth will be in consulting and IT training, together with front-office applications. But Gartner points out that these areas are also first against the wall if budgets come under pressure.

Smaller investments are targeted on security solutions and mobile devices, while spending on desktops will be minimal and servers will see a decline.

UK investment is higher than the European average of 3%, though eclipsed by Germany, Portugal and Spain, which plan 6% increases. Whatever the investment, all countries are united in their flat levels of investment in staff.

"Organisations plan as little as a 2% increase in IT staff costs and a reduction in IT contractor spending as they try to manage costs," reveals Fulton. "Respondents in Europe will devote more of their staff budgets to project and programme management, IT administration, and system and network management in 2006."

Gartner’s predictions are based on interviews with 400 European organisations.


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