Enterprise Spending On The Upswing

In the latest sign that large enterprise customers will increase spending this year, 41 percent of IT decision makers plan to allocate more funds on technology this year, according to preliminary results of the annual VARBusiness State of Enterprise Spending report. Only 17 percent anticipate spending less, while the remaining 43 percent say spending will remain the same.

The full report will be released in the annual VARBusiness State of the Enterprise issue on April 19. In that issue, VARBusiness will report on how CIOs are approaching IT spending this year. In addition to profiling CIOs and some of the key IT initiatives their companies are undertaking, the report will also cover key business and technology requirements. It will also identify who's making key decisions.

Overall, the report shows a healthy increase in optimism by IT buyers. According to the survey, nearly three in 10 IT managers expect IT spending to account for a greater percentage of their companies' revenues in 2004 than it did last year, while 20 percent expect their IT spending to be less. But half, or 51 percent, say the percentage will remain the same.

That so many are keeping spending flat underscores the tight environment solution providers face when trying to sell to large enterprises, notably those in the Fortune 1000. Even companies that historically are known as innovative users of IT are holding the line. Take Rob Carter, the CIO of Federal Express.

In an interview, Carter said spending will be flat. But that was his own decision, one not mandated by FedEx CIO Frederick Smith.

"The easy thing to do is to ask for more money," Carter said. "It was something that was a passion of mine. I'm a shareholder and feel like it's an important thing for us to do."

So what's getting scrutinized these days? Software projects that require ongoing updates.

"I think we're looking a lot more carefully at those small enhancements and saying, 'Should we be doing as much of that as we are?' " Carter added.