Forrester's semiannual Business Technographics North America Benchmark Study examines the state of North American companies' IT budgets, purchase plans and control of IT processes. Firms will spend 2.3 percent more on IT in 2002 than in 2001, and 82 percent of these firms will at least retain their current budgets over the second half of the year, according to Forrester Research.

"Although IT budgets have stopped bleeding, it's still a harsh buyer's market for tech vendors," said Tom Pohlmann, senior analyst at Forrester. "In areas like IT outsourcing and enterprise apps, a vendor's best hope is to squeeze incremental business out of its installed base of customers."

In Forrester's previous Business Technographics Benchmark Study – the Business Technographics February 2002 North America Benchmark Study – Forrester found that IT and business execs were risk-averse and shifted their IT strategies toward infrastructure and do-it-yourself development and integration work. Key findings from the August 2002 report reveal new trends and a cautiously optimistic outlook on IT spending during the second half of the year.

  • On average, IT spending in 2002 is 2.3 percent higher than 2001. IT spending in consumer services and retail will grow by more than 7 percent, while high-tech firms and utilities lead the decliners.
  • Nineteen percent of the companies surveyed will raise IT budgets over the second half of 2002 – only 12 percent will cut them. Of those raising budgets, 37 percent will raise them by more than 10 percent.
  • C-level sentiments are on the mend. Fifty-five percent of respondents describe their executives as willing to "spend what it takes" on IT. As a point of reference, only 36 percent felt that way at the beginning of the year.
  • More companies have centralized IT management. Fifty-eight percent of Global 3,500 companies (firms with annual revenues of $1 billion or more) characterize their IT organizations as heavily centralized, compared with only 17percent of Global 3,500 companies at the beginning of 2001.
  • The midmarket isn't a growth opportunity for vendors. While midmarket firms (firms with annual revenues less than $1 billion) are more likely to increase budgets, they're also less likely to buy any of the technologies covered in the report, with the exception of ERP software.

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