X

Mixed signals for IT spending

While information technology budgets in 2003 remain flat, there are early signs a modest recovery is coming in 2004, according to a new report from Goldman Sachs.

2 min read
American businesses have continued to spend conservatively on tech during 2003, but a modest recovery is likely in 2004, according to a new study that Goldman Sachs released Monday.

A survey of 100 chief information officers of Fortune 1000 companies in August revealed that their expectations on technology capital spending have eroded slightly.

While describing the current spending scenario as "stable to improving," the CIOs surveyed indicated that frugal spending habits will stay in place for some time.

An earlier IT outlook survey that Goldman Sachs released in January indicated that average business spending on computer hardware and software would decline by 1 percent this year compared with last year.

The latest survey predicts that in 2004, technology capital spending could outpace overall IT budget growth. Although sentiment eroded slightly from another survey in June, CIOs now expect overall IT budget growth next year of 2.3 percent over 2003. For technology capital spending, the panel expects growth of 3.9 percent over 2003.

"Some users are thinking in terms of double-digit technology capital budget growth after three years of austerity, although most users' IT outlook is still fairly constrained. For now, the most prudent assumption is for a very modest but not miraculous improvement," according to Goldman Sachs. Nearly half of those surveyed are postponing expectations for a pickup in tech spending to the second half of 2004 or beyond.

The survey also ranked software and hardware vendors as recipients of IT spending. Dell and IBM continue to rank highest among hardware vendors. In storage, StorageTek and Hewlett-Packard rise in the rankings, along with EMC and IBM.

Both network-attached storage and storage networking have moved into the top tier. NAS had not appeared in the top tier in four surveys, and storage networking had not placed among the top priorities since February. In software, Red Hat, Microsoft and Symantec remain at the top, joined by systems management vendors, Mercury Interactive and BMC Software.