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Western European Verticals Set to Increase IT Budgets in 2004

Published
  • March 17 2004, 1:00am EST

IDC's new European Vertical Markets survey reveals that 2004 will see an improvement in companies' IT operating budgets. According to the survey, 35.4 percent of companies plan to increase their overall IT budget and 26.6 percent expect to allocate more resources to new initiatives, mainly in banking and retail/wholesale. This, however, will not immediately lead to an increase in external IT spending - only 23.2 percent of companies will spend more on external IT requirements.

The survey focuses on IT operating budget dynamics, channel selection and companies' satisfaction with their primary IT supplier and shows that:

  • 2004 will see some improvements in companies' approach to IT investment, but high IT budgets will not translate immediately into high external IT spending, reflecting companies' cautious approach to IT investment. This is particularly true of banks. A high percentage plan to increase their IT operating budgets and start new initiatives, but relatively few expect an increase in external spending.
  • System integrators, consultants and software firms will absorb the bulk of IT spending. "This is particularly true for banking, discrete manufacturing and business services. Partnerships with players in this area are, therefore, essential. VAR recruitment is also critical, as a significant percentage of companies plan to increase their spending through VARs in 2004," said Giuliana Folco, research director, European Vertical markets.
  • Vendors should consider that companies are generally well satisfied with the technical skills and quality of service of their primary IT suppliers, but are less satisfied with cost of ownership and knowledge of customers' businesses -- the other two most important criteria when choosing an IT supplier. Action in this area is therefore needed.

"Western European Vertical Markets IS Operating Budget Dynamics, Channel Selection, and Customer Satisfaction: An IDC Survey" draws on the results of IDC's European Vertical Market survey, carried out in November/December 2003 in the top 5 Western European countries (France, Germany, Italy, Spain and the U.K.) among 1,686 companies with more than 20 employees.

The survey covers vertical market IT spending directions, solution priorities, investment plans, adoption of new technologies and mobility, infrastructure enhancement (servers, Web services, storage), the role of IT within the organization, and customer satisfaction.

Please visit www.idc.com for more information.

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