eCommerce Development-IT Spending: Looking Down the Road for 2005

IT Spending: Looking Down the Road for 2005

02/21/2005

eMarketer's latest report, IT Spending and Trends, finds that while growth is expected for the technology market this year, estimates vary from 2.5% to over 8%.

Industry analysts predict that worldwide information technology spending will see growth of between 4% and 8% during 2005.

On the other hand, comparative data drawn from multiple surveys of IT executives indicates that large global enterprises expect their technology budgets for the coming year to show less increase, between 2.5% and 5.4%.

How do you know what to believe — what to base your projections on?

eMarketer's new report, IT Spending and Trends, looks at all the numbers and explains why some are high and others are low.

Among the most conservative outlooks, Gartner Inc. found in a late-2004 CIO survey that on average, respondents expect their IT budgets to increase by just 2.5% in 2005. Gartner surveyed more than 1,300 CIOs from 30 countries for its study, finding that IT executives continue to be under pressure to keep costs down, while they are also expected to find ways to help their organizations use technology to become more efficient.

In another study conducted by technology search site KnowledgeStorm, researchers found that US IT professionals plan to increase their IT budgets by an average 3.8% in 2005, while non-US respondents to the survey indicated that their budgets would grow by an average 5.5%.

Similar to KnowledgeStorm's findings, Forrester Research found in a December survey of IT decision-makers that most large enterprises expect their companies' IT spending to increase by an average 3.9% in 2005. Forrester surveyed 1,368 IT executives from companies based in North America and Europe, noting that software applications are a leading priority for the coming year, with 59% of respondents planning to either upgrade or deploy major applications in 2005.

Morgan Stanley's monthly survey of Fortune 1000 CIOs found that as of December 2004 respondents expect their IT budgets to increase by an average 4.0% this year, with any future budget revisions being three times as likely to go upwards than downwards.

In contrast, CIO Magazine's monthly Tech Poll has tracked a downward trend in large enterprises' IT spending plans for the coming year, with its January 2005 outlook dropping to its lowest level since November 2003. On average, IT executives indicated that their IT spending would increase by 5.4% over the next twelve months, down from an average anticipated increase of 8.2% at the same time last year.

These latest numbers bring the Tech Poll results closer to other industry observers. CIO Magazine explains that cost containment continues to be an overriding priority for respondents to its survey, and is contributing to the tightening trend.

And finally, according to its most recent survey of 100 US and European CIOs, Merrill Lynch found that large enterprises plan to increase their technology spending by an average 5% this year, compared to 4% growth in 2004. Software and storage were listed as CIOs' top priorities for 2005, while spending on PCs and IT services was expected to be lower.

Get category breakouts. Get regional breakdowns. Make sense of all the IT forecasts and projections gathered from around the world, read eMarketer's new IT Spending and Trends report today — and make better business decisions tomorrow.

Source of Article: eMarketer

Date of Article: February 17, 2005