IT Spending To Rise 4.3% In 2006, Forrester Predicts - InformationWeek

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IT Spending To Rise 4.3% In 2006, Forrester Predicts

While 53% of respondents expect IT budgets to increase, only 7% foresee decreases.

More than half of business-technology executives see IT spending increasing, on average, by 4.3% next year, according to a survey of 922 IT and business decision-makers conducted last month by the IT consulting firm Forrester Research.

While 53% of respondents expect IT budgets to increase, only 7% foresee decreases. The 4.3% anticipated increase in IT spending next year is up from 3.4% for 2005 and 1.4% in 2004.

The survey revealed a few curious details. More companies that centralize IT will increase tech spending next year versus those with decentralized IT organizations, 60% to 46%. Also, more companies that outsource IT will raise IT spending than those that don't, 54% to 40%.

Forrester senior analyst Michael Speyer cautions not to read too much into these numbers, noting, for instance, that survey takers might not be aware of all the IT spending plans for units within companies with decentralized IT organizations. In addition, he conjectures, companies that outsource may have experienced efficiencies that will allow them to increase IT spending elsewhere.

Similarly intriguing are survey results showing that 65% of Siebel Systems Inc. customers and 59% of Cisco Systems buyers will increase IT spending next year.

"We could read anything into these numbers," says Speyer, who wouldn't speculate why he thought these vendors' customers will increase IT budgets next year. "What these numbers reveal is tantalizing, but what they hide is vital."

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