Global IT spending to rise in 2004

07-04-2004

by Martin Lynch

Worldwide IT spending will increase by 5 percent in 2004, thanks to an improving economy and the need to address infrastructure issues, according to IDC.

The prediction was made at IDC's Directions 2004 Conference in Boston. In a series of end-user surveys conducted over the last nine months, IDC found that the likelihood of IT budget increases has risen by nearly 15percent. At the same time, business IT investments were up nearly 16 percent in the last quarter of 2003. But it's not all plain sailing, with IDC claiming caution will still overshadow any IT spending.

"IT spending growth will continue to recover along with the overall economy, but most CEOs remain cautious about the recovery and are focused on addressing their top business priorities," explained Stephen Minton, research director in IDC's Global Research Organisation. "In this environment, most decision-makers will continue to be very cost-conscious and are unlikely to authorise big ticket purchases."

The IT segments that are expected to gain most from budget increases this year are those that were largely under-funded over the past couple of years: PCs, servers, and infrastructure software. In addition, arenas like security and mobility are expected to become increasingly important growth areas in many budgets.

IDC claimed that most IT departments will continue to focus on infrastructure improvements, introducing new software solutions and managing the costs of IT. However, IDC admitted that businesses are again starting to look at how IT can help cut costs and generate new business.

Taking a closer look at US business executives, IDC found that IT is central to the execution and success of today's business strategies. It found that senior business executives already spend 20 percent of their time dealing with IT issues, and that percentage is on the rise.

"A growing level of executive commitment combined with the desire to 'play offence' with technology supports the argument that IT matters and the vast majority of business executives clearly understand this," said Frank Gens, senior vice president of research at IDC.