Flat prospects from Goldman Sachs

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Nearly half of technology managers at major US companies expect hi-tech spending to be flat this year compared with 2001, while almost a quarter see it falling, according to brokerage Goldman Sachs at its Technology Symposium.

In the survey, 47 per cent of corporate managers said spending on information technology would be flat, while most of the remainder were almost equally divided between forecasting declines and increases. One per cent of the respondents said they did not know how IT spending would change this year.

Looking on the bright side, that means that corporate investment plans for computer systems, software, and storage and security are starting to stabilise after sharply lowering in 2001, in response to a developing economic slowdown and a global technology slump.

"Budgets could gradually loosen in the same way that they tightened over the course of 2001 as the economy shows improvement," Goldman Sachs said in a report summarizing the results of its survey of information technology executives at 100 companies with revenues of at least $1 billion.

The company expects the brand-name technology vendors to pick up market share as customers stick to tried and trusted names such as Microsoft, IBM, Cisco Systems, Dell Computer and EMC.

The biggest gainers in computer hardware were seen as Dell and IBM, with 39 percent of surveyed managers and 34 percent, respectively, saying they would get more business. The biggest share losers were expected to be Compaq Computer and Hewlett-Packard at 40 percent and 32 percent, respectively.

With regard to software, 50 per cent of managers surveyed said they would buy more from Microsoft, while 41 percent said they would increase spending with enterprise software vendor SAP. But it’s not all good news for Microsoft. The lowest priorities for the year include desktop PC upgrades to Microsoft's Windows 2000 and Windows XP operating systems. Novell was a big loser, with 26 per cent of users saying they would buy less from company.

Inevitably the spectre of 11 September was raised with Goldman Sachs claiming that the top five spending priorities have been influenced by the attacks on the US. These are security software, data networking, database software, storage software and disaster recovery.

And for all those vendors out there frantically working on Linux applications, bad news. More than two-thirds of surveyed managers said they had no plans to use the open standards-based operating system in 2002. Only 1 percent of managers said Linux would be their main system for running powerful servers over the next two to three years.

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