IDC’s FutureScan: IT Buyer Expectations Pick Up

FRAMINGHAM, MA – MARCH 2, 2005 – Buyer expectations for IT spending growth over the next twelve months have taken a decidedly optimistic turn, according to the IDC FutureScan results for March. After February's sober outlook of less than 7% growth, the business and IT executives polled by IDC are now expecting IT spending increases of more than 9%.

At the same time, the external market indicators, including revenue forecasts and macroeconomic trends, stayed the same as in February, suggesting much more modest IT spending growth between now and March 2006. IDC's forecast for U.S. IT spending for the next twelve months falls just below the market indicators at 5.6%.

"After several quarters of decent corporate profits, it seems that buyers are hoping some additional funds will trickle down into IT spending," noted John Gantz, IDC's Chief Research Officer. "Although continued economic growth is clearly having a positive effect on the outlook of IT buyers, it's too early to tell whether these hopes will turn into reality."

Gantz notes that buyers are still in the throes of infrastructure upgrades, which will chew up about 40% of 2005 IT spending. The remaining 60% will be about evenly split between spending on new initiatives and spending on initiatives already underway.

Although the macroeconomic indicators are flat, they are still positive with lower expectations for 2005 and 2006 profits and GDP growth balanced by a steadily improving stock market and historically low interest rates.

"The user expectations this month just don't seem warranted, given macroeconomic conditions, vendor price wars, and the current conservative fiscal bent for most companies," added Gantz. "This is why IDC repeats these surveys every month and combines the results with other inputs. After looking at all the available indicators, IDC is still quite comfortable with its current forecast for U.S. IT spending growth."

FutureScan is a set of market metrics that measure supply and demand in the IT industry based on leading indicators and customer surveys. Values reflect expectations of future growth, with an index value of 1000 indicating zero growth and each additional 10 points representing roughly 1% of expected growth or contraction.

FutureScan results for March and prior months can be viewed at www.idc.com/futurescan .

For more information about FutureScan, or any other products from IDC's Global Research Organization, please contact Amie White at 508-935-4653 or awhite@idc.com.

About IDC

IDC is the premier global market intelligence and advisory firm in the information technology and telecommunications industries. We analyze and predict technology trends so that our clients can make strategic, fact-based decisions on IT purchases and business strategy. More than 775 IDC analysts in 50 countries provide local expertise and insights on technology markets, and our management team is comprised of experienced and respected industry luminaries. Business executives and IT managers have relied for more than 40 years on our advice to make decisions that contribute to the success of their organizations.

IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. Additional information can be found at www.idc.com .

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