Corporate spending pullback has begun, one that will sap investments in new technology, slowing growth for many computer companies.
In a speech yesterday, Gartner CEO Manny Fernandez said that Year 2000 spending will become the No. 1 technology priority for companies worldwide, beating out spending on nearly all other new computer technologies combined.
"Our latest forecast is that that percentage will soar to 44 percent of IT [information technology] budgets in 1999."
The statistics are based on a survey of technology managers at 15,000 small, medium, and large companies in 87 countries. Gartner has estimated the worldwide cost of preventing potential Year 2000 computer failures will total $300 billion to $600 billion, with $150 billion to $225 billion of that amount to be spent by U.S. companies alone.
That's funding robbed from new technology that companies otherwise might have installed in the coming years. Projects that could be delayed or cut back include new software to link key business operations, larger data storage networks, new computer-based customer service phone centers, and email systems, Fernandez said.
Overall, computer systems account for an average of between 5 percent and 8 percent of corporate budgets in the companies surveyed, depending on whether the business is an aggressive user of technology or not, according to Gartner.
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