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IT Spending Projections Rise Significantly in April

Wednesday 2 June 2004 18:09 CET | News

The May CIO Magazine Tech Poll reports that IT spending projections rose to their second highest number in three years. The expected 7.8 % increase was the highest since 8.2% in January of 2004.

In addition, the poll reports the number of respondents receiving salary increases over the past 12 months was higher than at any point in 2003. Technology spending projections also remain consistent for the fifth consecutive month. The CIO Magazine Tech Poll provides technology and business executives, economists, and policymakers with a tool to gauge technology growth trends and to assess their impact on the overall economy. The poll panelists are asked to answer questions on overall current and projected IT budgets on a monthly basis. Also covered are future spending plans for IT hardware, software, services, and Internet initiatives. CIO Magazine Technology Growth Indicators The CIO Magazine Tech Poll results are used to construct the CIO Magazine Tech Future Growth Index (TFGI) which projects IT activity over the next 12- months. In May, the TFGI was 3.3, up from April and at the highest level this year. Overall IT Budget And Costs During May 2004, the CIO Magazine Tech Poll panel projected IT budgets to grow by 7.8% over the next 12 months, higher than April levels of 6.6%. In addition, the panel reports IT budgets increased by an average of 5.2% over the previous 12 months, higher than 4.3% reported in the April poll. IT Sectors When asked about spending in eight specific IT categories, the average number of panelists planning to increase spending decreased to 43.8% in May (from 45.1% in April). Those planning to decrease spending decreased to 11.9% (from 13.2% in April)(3). Security software continues to be the strongest sector in the poll with roughly 57.7% of respondents planning to increase spending (a decrease from 59.9% in April) while only 2.6% plan to decrease spending (roughly flat with April). Computer Hardware. The outlook for Computer Hardware spending increased slightly month-to-month. Among the panelists, 53.2% plan to spend more, up from 53.0% in April, while 13.8% plan to cut spending, down significantly from 16.5% of panelists in April. Infrastructure Software. The percentage of CIOs planning to increase spending on infrastructure software was 36.5% in May, a decrease from 39.5% in April. Those planning to decrease spending fell to 9.0% in May from 11.2% in April. Compensation Costs and Labor Market Conditions. IT compensation costs (including salaries, benefits, and bonuses excluding stock options) reportedly rose by an average of 4.1% in the 12 months ending in May, down slightly from 4.4% in April, and up significantly from 1.9% a year ago. Six-point seven percent (6.7%) of respondents report IT professionals were hard to find and retain, up from 4.9% last month and up from 3.4% a year ago. Internet Budgets And Business Internet Revenues. Overall, panelists expect to generate 11.1% of their revenues from Internet activity (B2B2C) over the next 12 months, compared to 8.9% during the previous 12 months. This is flat from last months levels. Internet Purchases. On average, during the next 12 months, panelists expect to purchase 20.6% of their materials, supplies and parts over the Internet, up from an estimated 16.8% over the past 12 months. Special Question In Mays poll, panelists were asked their views on Intels planned introduction of a 64-bit x86 extension server processor and what that would mean for their organizations roadmap to use 64-bit x86 processors. Only 1.3% of panelists said that it had a significant impact on their roadmap, while 13.7% said it would somewhat impact their roadmap. The majority of respondents, 76.1% of CIOs, reported that it had no impact on their plans for adopting 64-bit processors in their organization. CIO Magazine Tech Poll The CIO Magazine Tech Poll was created by


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