Just What Are Companies Doing With Their IT Dollars?

A number of new studies are surfacing which suggest that IT departments are still alive but cautious.  We report on a Gartner and Goldman Sachs U.S. IT Spending Confidence Survey in this issue; we’ll report on a study from CIO Insights next week.

IT departments budget and spend depending on the demand of their customers, typically the business they’re supporting.  Businesses typically make their plans based in part on the cycles in their own business and industry and in part on what’s going on in the economy.  Right now, the short-term bad news from the economy has overpowered much of the longer-term planning.

Gartner expects that IT department technology budgets in the U.S. will remain flat for the rest of 2002, however they expect capital spending to increase a bit in the fourth quarter and total technology spending for the year to increase 1.5%.

Although nearly 90% of the respondents anticipated a modest economic recovery by year-end, most of them do not expect to change their technology spending as a result.  As a result, customers continue to enjoy some price negotiation power with vendors (50% reported this ability had increased).

While most new projects are on the back burner for now, a few sectors will do better.  These include security, storage, Internet project initiatives, other web-based applications, and PDAs.  Web services, included there, are high profile, with 63% of the survey participants planning to implement something in this category within 24 months.

You can get more information about this study at www.gartner.com.

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