November 13, 2001
Executive Survey Finds Tech Spending
Is Unlikely to Rebound in Coming Year
By WILLIAM M. BULKELEY
Staff Reporter of THE WALL STREET JOURNAL
(emphasis mine)
Corporate technology officers expect their spending will rise 2.5% this year, followed by a tepid 1.5% rise next year, according to a survey by Gartner Inc. and SoundView Technology Group Inc.
The conclusion of this survey of more than 1,000 information technology professionals at Gartner's annual conference last month comes on top of other recent studies that have found scant evidence of a rebound in technology spending. In 2000, spending on information technology rose 7%, according to Gartner.
Next year "has the potential to be a very tough year for vendors," said Michael Fleischer, chief executive of Gartner, a market-research firm in Stamford, Conn.
Still, Mark Loehr, chief executive of the investment firm SoundView Technology Group, said that given the economic environment he had expected a drop in such spending, so the survey "supports our conviction that the bottom has been reached."
Surveyed chief information officers said any budget increases would go to specific areas, including improved security, data storage, some Internet applications and, more surprisingly, personal digital assistants. Gartner analysts say companies increasingly are planning to put PDAs with wireless capabilities in the hands of sales or service workers to give them portable devices to hold information on products and prices that can be easily updated.
Gartner analyst Al Case, who designed the survey, said executives may be able to "free up money for new applications" because they are cutting back on spending for contract employees, and they often renegotiate old software licenses to get lower rates.
According to the survey, spending on information technology at the beginning of the year was expected to rise 8% in 2001, so managers have been underspending their original budgets in reaction to a slowing U.S. economy. |
