IT Spending Projected To Rise In Next Few Years

The heady days of IT spending in the late 1990s and 2000 aren't coming back, but businesses are expected to open their pocketbooks a bit wider during the next few years, a market-research firm reported this week.

The Aberdeen Group expects worldwide IT spending on products and services to increase 4% in 2003, with spending in the United States projected to rise 3.6%.

The Aberdeen Group projects global IT spending to reach $1.3 trillion next year, increasing to $1.4 trillion by 2006. Overall long-term growth is projected at a compound annual growth rate of 4% to 5% worldwide and from 5% to 6% in the United States.

Asia and the Pacific Rim are expected to lead the rest of world in IT spending from 2003 to 2006, recording a 6.5% compound annual growth rate. North America is expected to follow with 4.9% and Europe with 2.6%. However, the days of double-digit growth in the late '90s won't return in the foreseeable future. Factors that contributed to the phenomenal growth but have since vanished are corporate retooling around Y2K issues, the Internet and E-commerce euphoria, and excessive venture-capital investment in dot-coms, Aberdeen says. In addition, there's no dot-com threat driving companies to speed up E-business deployments.