New IDC Survey Shows 85% Of Companies Believe IT Spending Cutbacks Are Over

FRAMINGHAM, MA – FEBRUARY 25, 2003 – A majority of companies in the US, Europe, and Asia/Pacific (85%) expect to increase or maintain their IT spending levels in 2003, but economic stability and corporate profits remain key to the IT market rebound, according to a new study from IDC. The study, based on a survey of nearly 1000 CEOs and CIOs in 12 countries, indicates that many organizations will re-evaluate their IT spending plans on a constant basis throughout the year, with improvements in business confidence likely to translate into a solid recovery for IT suppliers.

 

"IT suppliers should monitor economic and business confidence indicators for the early warning signs that IT spending will either exceed or be lower than current projections," said Stephen Minton, program director at IDC Worldwide IT Markets. "Just as IT spending was severely disrupted in 2002 by wild card factors including WorldCom and Iraq, so it is that the outlook for 2003 remains clouded by similar uncertainty."

According to the survey, CEOs are more optimistic than their CIO counterparts on the levels of IT spending increases expected this year. While CIOs look to competitive pressures and changing business needs as triggers for budget increases, CEOs remain focused on the bottom line and the wider economic outlook. Almost half of all CEOs cited low profits and a weak business climate as potential reasons to delay IT spending this year.

"Routine infrastructure upgrades will dominate short-term budget priorities, taking up almost half of all spending in 2003," said Minton. "This isn't surprising, given that a lot of companies have spent very little during the past two years on the technology which is already core to running their business." This pent-up demand is expected to positively impact sales of storage hardware, PCs and network equipment, although price competition will continue to depress overall revenues in these sectors.

The survey also shows that almost one third of business IT spending now originates outside of the traditional IT department, and that CIOs in Asia Pacific regard the cost of IT as a major barrier to new spending. The new report, "CEO Perspectives – Global IT Spending Plans 2003" (Doc # 28749) is available on http://www.idc.com. Additional findings from the survey will be highlighted at IDC’s 38th annual Directions conferences, to be held March 20 at the John B. Hynes Convention Center in Boston and March 26 at the San Jose Convention Center in San Jose, Calif.

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About IDC

IDC is the foremost global market intelligence and advisory firm helping clients gain insight into technology and ebusiness trends to develop sound business strategies. Using a combination of rigorous primary research, in-depth analysis, and client interaction, IDC forecasts worldwide markets and trends to deliver dependable service and client advice. More than 700 analysts in 43 countries provide global research with local content. IDC’s customers comprise the world’s leading IT suppliers, IT organizations, ebusiness companies, and the financial community. Additional information can be found at www.idc.com.

IDC is a division of IDG, the world’s leading IT media, research, and exposition company.

 

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