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Strategies & Market Trends : The Final Frontier - Online Remote Trading -- Ignore unavailable to you. Want to Upgrade?

To: Morpher who wrote (7490)	6/16/1999 8:05:00 PM
From: TFF	Respond to of 12617

Online drives Wall Street IT spending Financial industry seen spending $24.2 billion by 2002 By Emily Church, CBS MarketWatch Last Update: 4:54 PM ET Jun 16, 1999 Silicon Stocks NEW YORK (CBS.MW) -- Wall Street firms appear likely to spend more money on information technology than most in the industry had expected, thanks to a push into online trading. Total IT expenditures are seen hitting $24.2 billion in 2002, growing at a rate of 7.1 percent per year from 1998, according to the TowerGroup, which on Wednesday released results of its survey of some 250 companies. The tech industry had been bracing for a steep slowdown in IT spending in the second half of the year. Many worried that firms would cut spending on Year 2000 efforts and even stop investing in technology ahead of the millennium. And while spending is seen slowing from the 26.5 percent compound annual rate between 1996-1998, the outlays aren't likely to stagnate either, Tower said. "I think we're going to continue to see robust spending in IT," said Larry Tabb, research director. A shift in spending on the Internet is driving the growth. Tabb was at the Securities Industry Association conference in New York. "Merrill Lynch's plans to trade online at lower prices is the kind of technology deployment that's at the heart of it," he said. The companies are expecting that some 50 percent of all their stock and mutual fund orders from retail customers will be received through an electronic channel, up from an estimated 19 percent today. As a result of those expectations, companies look prepped to spend heavily to bring their businesses online. Tower estimates that Merrill's (MER: news, msgs) spending some $2 billion this year on IT, the most for any single company. Morgan Stanley Dean Witter (MWD: news, msgs) is second, at an estimated $1.5 billion. The winners Wall Street is showing little sign of changing a tendency to do much development work in house, the survey shows. But, the spending trend could still deliver some winners for the vendors. "All of the people providing the plumbing of the Internet are just going to grow like gangbusters," he said. The survey stayed away from specific vendors, but companies like equipment makers Cisco (CSCO: news, msgs), Lucent (LU: news, msgs), Internet service providers and hosting services and telecommunications carriers such as MCI WorldCom (WCOM: news, msgs) to name a handful, fit the profile. NT vs. UNIX Software and hardware spending isn't seen growing as strongly. Those companies are expected to spend 2.3 percent of their IT budgets on software and 4 percent on hardware. Services, meanwhile, are expected to absorb 21 percent compounded from 1996 to 2002. On the software server side, Novell (NOVL: news, msgs) looks likely to lose significant market share, according to the respondents. Microsoft's (MSFT: news, msgs) Windows NT has emerged as the new platform of choice for Wall Street firms, growing some 130 percent in the last two years, Tabb said. "There's a good horserace for server software between Unix and NT," he added. Sun Microsystem (SUNW: news, msgs) is primarily a UNIX vendor. Unix is forecasted to have a 49 percent share of the companies vs. 44 percent for NT in 2002, Tower said.