The overall level of business spending on information technology (IT) in North America will remain flat through 2002, unless there is a significant uptick (or further decline) in the economy, says a new survey from META Group and First Albany Corp. The survey, which included responses from more than 300 IT managers, indicated that overall IT spending by businesses in 2001 (which had been budgeted to grow 2.4 percent compared to 2000) actually grew by only 0.1 percent after budget cuts and project delays through the year. The study indicated that corporate IT budgets for 2002 anticipate virtually no change from 2001 spending levels. More detailed analysis of the results indicate that large enterprises expect to spend 2.3 percent less in 2002. This decrease will be offset by an expected 8.5 percent increase in IT spending by midsize companies. Small companies expect no significant increase or decline in their IT spending levels. "This slow economy is a time of lower risk for midsize companies looking to make major system upgrades that larger companies have already completed," says Doug Lynn, a META Group analyst.
The survey found that midyear budget cuts during 2001 occurred across a wide range of technologies and project types. However, security and storage both bucked the trend with spending levels that exceeded those originally anticipated.
When asked what areas of IT purchases they were most focused on, survey respondents listed computer hardware, security, networking, storage, and operating systems. They indicated that the greatest positive change in spending for 2002 will go to systems integration, CRM, security, networking and ERP.
Outsourcing, Web hosting and telecommunications were among the spending areas with the biggest expected decreases in 2002.
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