Trillions still available for IT spend

Industry analyst and high-tech startup advisor David Margulius told an audience of 500 attendees at Demo 2002 that contrary to...

Industry analyst and high-tech startup advisor David Margulius told an audience of 500 attendees at Demo 2002 that contrary to conventional wisdom, IT spending is still weighing in at 5% to 10% of overall corporate spending.

Exhorting the audience of startup executives and venture capitalists that their challenge is to get a share of this $2 trillion-plus spend, Margulius, president of Pacific Media Group, outlined the kinds of IT technology that enterprise-level companies are willing to invest in. And he reminded the crowd that $2 trillion is enough to create 10,000 $100 million companies.

"Corporations are focusing on three major areas," Margulius said.

The first area is stepping up integration efforts, including enterprise application integration, to get more out of a company's current technology such as its ERP and CRM systems.

Secondly, according to Margulius, companies are focusing on permanently reducing head counts by buying into more self-service applications and other programs that automate business processes. If and when the next economic downturn takes place, companies do not want to go through the same painful cycle of layoffs as witnessed during the last year and a half, said Margulius.

Finally, Margulius said companies were willing to spend money on creating better multichannel systems for customer service, including using customer portals, warehousing, and data analysis to understand customer needs as well as expanding marketing reach with European Web sites.

"Many believe the tech joy ride is over and the CEO has handed the keys to the CFO. That is conventional thinking," Margulius concluded.

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