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To: Boplicity who wrote (9295)	10/7/2002 7:11:35 PM
From: stockman_scott	Read Replies (1) \| Respond to of 13815

Tech Spending Seen Rising 7 Percent October 07, 2002 02:22 PM ET By Caroline Humer LAKE BUENA VISTA, Fla. (Reuters) - Worldwide spending on technology will rise 3.4 percent in 2002 and 7 percent next year, research firm Gartner Dataquest said on Monday, scaling back its earlier forecasts by several percentage points. Gartner, which is holding a technology conference here, said the timing for a rebound in corporate spending is proving elusive. Companies are not confident in the economy or in the technology sector and that has to happen before spending will turn, Gartner analyst Roger Fulton said. "The inflection point in the market moved away another six months," Fulton said. Corporations have cut back on spending amid the economic downturn as they worry about their companies' own bottom lines. Customers of the nation's largest telecommunications equipment maker Cisco Systems Inc. CSCO.O are increasingly unable to forecast their future business, President and Chief Executive John Chambers said during the conference. "Their visibility now is getting tighter," said Chambers. Gartner said when companies start buying, personal computers, low-end computer servers and infrastructure software will be at the top of their list. Gartner lowered its 2002 technology spending growth forecast to 3.4 percent from 7.6 percent, and said growth in software, services and telecommunications would make up for a decline in sales of new computers. In 2003, Gartner said, it sees spending rising 7 percent, not 9.6 percent as previously forecast, as hardware sales begin to turn around, albeit at a slower pace. Gartner's outlook for muted spending in 2002 and 2003 comes at a time when stocks of technology companies are trading near record lows as their executives struggle to forecast when the industry will begin to grow again. Several technology companies, including microchip maker Advanced Micro Devices Inc. AMD.N , data storage company EMC Corp. EMC.N and computer services company EDS Corp. EDS.N have warned in recent weeks that their quarterly financials are worse than expected. To fight the stalled growth, companies have pushed into new markets. Cisco, for instance, is pushing into the data storage business as that has become part of the corporate network. Chambers said on Monday that Cisco will probably work with storage software company Veritas Software Co. VRTS.O . Gartner said it expects technology revenue of $2.30 trillion in 2002 and $2.46 trillion in 2003, up from $2.23 trillion in 2001. In 2001, Gartner said tech spending fell by 0.4 percent. This year hardware revenue will contract to $323.3 billion, the research firm said, before growing to $338.8 billion in 2003. Gartner said the PC market will increase slightly in 2002. Services revenue growth will slow in 2002 to 2.8 percent and sales will total $557.5 billion, up from $542.3 billion in 2001. In 2003, services will grow to $597.1 billion, up 7.1 percent. Telecommunications and networking revenue will be $1.34 trillion in 2002, up 4.8 percent from 2001, and then grow 7.5 percent to $1.45 trillion in 2003, Gartner said. Software revenues will grow 3.6 percent to $77 billion in 2002 and then grow another 6.5 percent to $82 billion in 2003.