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Aberdeen Expects Uptick in IT Spending

After several years of sluggish information technology spending, a new study expects a slight increase in enterprise IT budgets over the next six to twelve months.

Aberdeen Group, based in Boston, said Monday it sees IT budgets growing by 2.7 percent over the next six to twelve months. The numbers comes from its quarterly survey of chief information officers, who gave indications of future corporate IT spending trends.

"We are seeing an uptick, but not a surge in IT spending," says Hugh Bishop, senior vice president of Aberdeen Group, and author of the report.

Aberdeen's new report entitled "Technology Forecasting Consortium: 2003 User Buying Intentions," found that CIOs their purchasing priorities would be for application software, technology infrastructure, hardware and services.

"On the infrastructure side, storage and security are showing the strongest performance, while customer service is an application area where we are seeing some growth," Bishop added.

But while the indications that CIOs and other IT professionals give Aberdeen are a decent barometer of future spending, the surveys are often more optimistic, than actual spending.

By comparison, although Aberdeen sees a small pickup in IT spending in the near future, it published an even more optimistic survey in September 2002, which forecasted spending would increase by an average of 3.7 percent over the past six months.

Bishop said that when examining the financial data of the top 20 companies, which are the leading IT suppliers, the numbers are lower than his group's forecasts. "For the last quarter of 2002, overall information technology spending grew by 1.2 percent," Bishop said.

Bishop said that Aberdeen believes overall IT spending in the U.S. will grow by 3.4 percent this year to $468 billion, up from 2002 when it reached $451 billion.

"I don't think we are going to see big IT spending increases anytime soon. We are finding IT spending maps closely to the economy, which in the U.S. seems to be skittering along," says Bishop.

Bishop also said he expects the global IT spending picture to be better than the U.S. this year. He pointed to expected IT spending growth in China of 14 percent, Mexico 7 percent and Canada 6 percent.