CIOs See Steady IT Spends in ’06

Don’t expect 2006 to be a breakout year for IT spending.

According to a new report from Merrill Lynch based on 100 CIO surveys,
overall IT spending will grow by 2.5 percent in 2006, up marginally from the
2 percent mark recorded in 2005.

That’s not to say that CIOs don’t have wish lists of things they want to
do. The study found that 65 percent of respondents had “long wish lists” of
IT project that have not yet been funded.

IT staffing is also expected to grow by only 1.5 percent per year with
just over a quarter of respondents (26 percent) reporting no head count
growth at all.

In 2006, storage spending is predicted to hit 10.1 percent of enterprise
IT budgets, which is the same level as 2005. The 2005 figure is up
marginally from 9 percent in 2004.

The increased storage spending was prompted by compliance issues, such as Sarbanes-Oxley, as well as data growth.

The march of x86 servers is expected to continue in 2006 with 75 percent
of survey respondents indicating they planned an purchasing one.
Dell is apparently the No. 1 choice globally, with IBM coming in second
in Europe and HP holding down the No. 2 spot in the U.S.

Unix servers will also be bought in 2006, with two-thirds of the respondents saying they expected to make a purchase. IBM holds down top spot as the most preferred
UNIX systems vendor at 29 percent. HP came in second at 19 percent and Sun
finished third with 14 percent.

On the Windows front, 78 percent of the respondents noted that Windows Vista would not have an impact on their rate of PC
purchases. And 38 percent said they would likely not
expect to use Vista in their organization until 12 to 18 months after Vista
is released, while 20 percent expected that it would take 18 to 24 months.

Linux use is also expected to grow without fear of legal complications.

Merrill Lynch’s study asked CIOs if they thought that potential legal
issues related to Linux would slow adoption.

Only 8 percent reported that
they consider legal challenges to Linux to be legitimate, and 81 percent
reported that they have not moderated Linux adoption due to uncertainty from
potential legal risks.

That’s not to say that certain vendors aren’t trying to convince CIOs
that there is a legal risk.

The study also found that 11 percent of CIOs
have been pressured in some way by a vendor (7 percent Microsoft and 4
percent “other”) about the alleged legal risks associated with Linux.

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