RealTime IT News

Survey Shows No IT Spending Upturn in Sight

Although IT spending is no longer in free-fall, expectations for a real improvement are premature, according to a survey of Fortune 1000 IT managers.

IT spending in 2003 remains flat with no sign of an upturn, notes a report from investment company Goldman Sachs, which polled 100 IT managers in mid-February. The report adds that while some key spending indicators were stable, the majority of them continued their recent decline.

The survey found that many executives expect IT spending to increase 1 percent this year -- below the 2 percent or 3 percent increase that had been hoped for. While not a big increase by any means, industry watchers are breathing a sigh of relief after last year's dismal numbers.

And the majority of managers polled think things will get worse before they get better.

''Over 70% of our IT managers believe that incremental budget tightening by management is more likely than budget loosening over the next three to six months,'' wrote the Goldman Sachs analysts in the report. And half of those polled so they re-examine their tech budgets every 30 days.

The technology industry has been suffering for the past two years, with the economic slowdown and corporate scandals fueling the problem. The bursting of the Internet bubble and the demise of a huge chunk of online companies didn't help the technology situation any either -- hurting investor's faith in all things technology.

But, surprisingly, the current world tensions and the looming threat of the U.S. going to war with Iraq doesn't appear to be hurting the industry as much as some analysts suspected it would.

''Only 19 percent of our respondents believe an easing or resolution of current geopolitical tensions will help to spur IT spending,'' reports Goldman Sachs analysts. ''Although this proportion is not inconsequential, it seems clear that the impact of political conflict overseas is only a factor on the margin.''

When asked what technology categories would make their purchase priority list, IT managers rated security software, wireless LAN and storage networking at the top of the heap. CRM software, Voice-over-IP equipment and storage management software all showed an increase in spending importance.