US tech spending projections slide in year’s second quarter

Outlook not so rosy

IT spending projections for the next 12 months decreased in the April-June quarter, as CIOs surveyed by CIO magazine in the US predicted they will increase IT spending by only 6.9% on average during the coming year.

That’s down from an estimated 8.6% average rise in the first quarter of the year.

“What is interesting is that, when you look at it by company size, for the first time in four years firms that have 5,000 or more employees are claiming their budget is going to increase more so than companies that have 100 or fewer employees,” says CIO publisher Gary Beach. “Usually, it’s the smaller companies whose budget is going to increase.”

While overall spending predictions dropped, 54.9% of respondents cited “enabling business processes” as their top spending priority for the year.

“The age of ‘do more with less’ is dead,” Beach says. “This bodes well for the services sector, as CIOs and IT professionals will be leaning more on services companies. It also bodes well for business application sectors, business intelligence and CRM.”

When asked about spending across eight specific IT categories, security software replaced storage systems as the top priority in the poll, with 55.2% of respondents planning to increase spending in this segment. Computer hardware took the second spot, with 48.1% of respondents planning to boost spending, and storage systems took third place, with 46.1% intending to increase spending.

According to the poll, 6% of the respondents reported that IT labour is “plentiful”, 64.3% say IT labour is “available”, and 25.8% report that IT professionals are “hard to find”.

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