CIOs' Optimism On IT Budgets Wanes

CIOs and other IT executives appear less optimistic about their overall technology budgets.

The most recent quarterly survey by Aberdeen Group found that companies expect to increase their technology budgets by an average of 2.7% in the next six to 12 months. The market researcher conducted the survey in January.

In September, Aberdeen found that businesses predicted their overall IT budgets would increase on average of 3.7%.

"The survey results show that IT spending growth will continue to be slow and incremental," Aberdeen analyst Hugh Bishop said in a statement. "This data is in line with Aberdeen's forecast that worldwide IT spending will increase approximately 4% in 2003 and is closely tied to GDP gross domestic product in capital-spending metrics."

In the most recent report, CIOs and IT executives state their "intent to purchase" and "priority of purchase" for business applications, technology infrastructure, hardware, and services. Out of 35 application categories, the five that get the biggest nods from respondents are content-document management, query-reporting analysis applications, project management, Web management, and Web analytics.

Aberdeen found that CIOs' average intent to purchase increased for all the categories, while the priority to purchase decreased. The shift from the previous survey indicates that more companies are considering new application purchases. The research firm interprets the responses as a "potential early indicator of a recovery in the business application sector."

The top three technology infrastructure categories in terms of executives' intent to purchase are application development tools, security gateways and services, and enterprise application integration software.

With the exception of mainframes, CIOs plan to increase spending in all hardware categories, with servers getting the most optimistic forecast. Among services, IT outsourcing leads the pack with expected growth of 1.8%.

In a report released late last year, Aberdeen predicted worldwide IT spending would increase by 4% in 2003, following an anemic 0.9% in 2002. From 2003 to 2006, spending is expected to increase at an annual rate of 4% to 5%.