Analyst groups offer mixed spending predictions

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A new survey from Merrill Lynch & Co. has confirmed what we all know by now: not many people are buying technology at the moment.

Companies are continuing to cut their technology budgets, spending less on new systems than they expected at the beginning of the year, according to the company’s survey of US and European chief information officers.

In the first quarter of 2002, companies delayed projects or took more conservative approaches to tech spending – and this year it doesn’t look as though there will be traditional fourth quarter rush to spend.

The good news for applications vendors is that the top priority once budgets come back will be spending on enterprise software, followed by security and disaster recovery. CRM software also high on the list of things to buy.

Meanwhile International Data Corporation (IDC) reports that companies are increasing their spending with third parties to run enterprise software.

According to IDC, between now and 2006, worldwide spending on IT services related to enterprise software and related functions will grow at a compound annual rate of 13.5 per cent, hitting $187billion.

IDC sees six main areas of services spending: supply chain management (SCM) software service, enterprise resource management, CRM, knowledge management, ecommerce and localisation/globalisation of enterprise software.

The solution services market is part of the overall worldwide IT services market, which will grow at a compound annual rate of 12.4 per cent between 2001 and 2006, reaching $626bn (£427bn) in 2006, according to an IDC forecast.

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