Large enterprises are getting more conservative when it comes to spending on e-business technologies. According to a Forrester Research survey of nearly 900 enterprise IT leaders at Global 3,500 and mid-sized firms, the average 2002 e-business technology budget is $29 million, compared to $41 million in 2001.

Reflected as a percentage of total revenue, this means companies will spend about 3 percent of revenues on e-business technologies, down from 3.5 percent last year; they will spend 4.8 percent of revenue on all IT investments combined.

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According to Forrester, corporate business executives expect a more significant drop in spending their IT executives do.

The area where purchase intentions are down most sharply is application software. Only 26 percent of companies surveyed will consider purchasing enterprise applications (CRM, supply chain management, procurement, ERP), down from 58 percent at the start of 2001.

Infrastructure buying (led by purchases of e-commerce servers) is still relatively hot, with 61 percent of Global 3,500 companies saying they are considering purchasing more hardware, such as storage equipment, as well as infrastructure software and bandwidth this year.

The general e-business spending decline comes at a time when companies are shrinking away from making "risky" IT investments, Forrester says. Another factor: Corporate decision-makers are trying to squeeze more value out of their prior technology investments of recent years, such as enterprise resource planning, customer relationship management, supply chain software and other solutions.

"Most companies will curb the number and types of technology products that they will consider buying in 2002," said Tom Pohlmann, senior analyst at Forrester. "Compared with 2001, companies are much more risk-averse when considering new technologies, opting to make do with what they have before buying more."

Other findings by Forrester include:

• Companies considering purchases of IT consulting and implementation services fell 28 percent from last year; demand remains strong in insurance, finished goods manufacturing, and utilities.
• Sixty-five percent of manufacturing firms are either considering or piloting enterprise application integration (EAI), which is the highest of any industry.
• One in five companies named a services division of a software company as one of their preferred service partners. IBM was the number one leader in this category (25 percetn), followed by Accenture (10 percent), PricewaterhouseCoopers (9 percent), Cap Gemini Ernst & Young (8 percent), and Deloitte Consulting (5 percent).
• Compared with last year, technology buyers are more likely to give business units influence over technology strategy and direction.
• Midsize firms lead Global 3,500 counterparts in rollouts of voice over IP and wireless LANs.
• Canadian firms lead their U.S. counterparts in adoption of PDAs, supply chain software, and enterprise portal technologies.

Editor's note: Read a recent CIN Guest Column by Forrester Chairman and CEO George Colony here: Guest Column: T-Shirts, Turtlenecks, And Ties