Study: Y2K Isn't Stalling IT Spending

Much of the IT industry has been holding its breath lately, awaiting a downturn in new technology initiatives as money and resources are poured into Year 2000 fixes. However, a new report from IntelliQuest Information Group (Austin, Texas), based on a survey of more than 1,220 IT managers, projects that IT spending will keep growing, oblivious to the Year 2000 money pit.

Most companies are planning to spend more money -- not less -- for new technology products over the next two years, the survey finds. Forty percent of the respondents say their companies will spend more or significantly more for technology hardware and software products in 1999 than they are spending in 1998, while only 10 percent of respondents report their companies will spend less. About half of this new spending will be to address Year 2000 issues.

"Recent predictions of a broad downturn in IT hardware expenditures due to Y2K issues are not likely to be realized," says Jamin Patrick, VP of panel research for IntelliQuest. "There will, however, be distinct product-category and brand winners and losers between now and the year 2000."

While the study did not drill down to the prospects for individual platforms such as AS/400, IBM itself rates high on companies' spending plans, since it's "an IT company with a good brand image and is perceived as having technology prowess," Patrick points out. "We found significant differences in purchase intent across product categories. Certain brands are perceived as being more risky than others for Y2K compliance."

The survey also finds that money that is going into Year 2000 projects is being evenly split between software, hardware, and services, Patrick adds.