In-Depth

Waiting for Recovery

Surveys suggest IT spending recovery still a no-show

• By Stephen Swoyer
• 03/27/2003

First, financial services powerhouse Goldman Sachs published the results of a survey of 100 chief information officers (CIO) which found that while the IT spending market appears to have stabilized, speculation about a recovery in IT spending is premature.

Next, consultancy Aberdeen Group weighed in with its own study. It found that executives had actually downgraded the amount that they anticipated spending on IT in 2003.

In Aberdeen’s survey, conducted in January, enterprise executives said that they expected to increase their technology budgets by 2.7 percent over the next six to 12 months.

Those results contrast with a similar Aberdeen survey—conducted in September 2002—which had CIOs projecting growing their overall IT budgets by 3.7 percent over the next six to 12 months.

"The survey results show that IT spending growth will continue to be slow and incremental," Aberdeen analyst Hugh Bishop said in a statement. Bishop said Aberdeen continues to forecast worldwide IT spending growth of about 4 percent in 2003.

In a somewhat mixed result, Aberdeen found that the average intent to purchase for all 35 of Aberdeen's application categories rose, while the average priority to purchase fell. "Aberdeen's analysis of this data is that more organizations are considering new application purchases but have yet to move into formal evaluation or purchasing processes," the firm said.

To some extent, Goldman’s report anticipated Aberdeen’s grim prognosis: “Over 70 percent of our IT managers believe that incremental budget tightening by management is more likely than budget loosening over the next 3 to 6 months."

Goldman’s report also disclosed a somewhat surprising upshot, namely, that when they companies do allocate funds for capital expenditures, IT organizations are more likely to purchase equipment from IBM Corp. or Dell Computer Corp. than other vendors. “Our survey results agree with our fundamental views that Dell and IBM continue to be the best-positioned enterprise systems vendors in the current environment.”

Goldman found that IT organizations were more apt to purchase storage from IBM and Dell as well, although perennial leader EMC Corp. remained the top choice. In its report, Goldman acknowledged that EMC’s “neutral” showing was “surprising in light of strong feedback around its latest core product upgrades."

Finally, 53 percent of CIOs indicated that they were implementing Linux, while another 39 percent said that they planned to use Linux in 2003.