2004: The year of controlled spending?
Published: 31 Dec 2003 12:10 GMT
"While corporate IT buyers are highly confident their employers' business prospects are rebounding, they are less confident that this rebound will translate into improved IT spending," says Gartner vice-president Brian Smith. "Historically, business confidence tends to lead IT spending confidence in an economic recovery."
Forrester Research has decided to stick its head slightly higher above the parapet than Gartner, and is predicting an increase in overall IT spending of 2.6 percent next year, compared to 0.8 per cent last year -- in Europe at least.
But drilling into the figures, although the outlook seems healthier than Gartner's predictions, some European countries will fair better than others. Spending will grow at a healthy rate in the UK and France but will remain flat or even drop in Germany and the Netherlands, according to Forrester senior analyst Charles Homs. "The UK is Europe's fastest-growing market for IT spending, with 6.5 percent growth in 2003 and a planned 6.2 percent in 2004."
All this sounds very encouraging for UK IT managers -- so long as Forrester is the only analyst firm you talk to. Market research specialist NOP has released figures that almost completely contradict Forrester's findings. German companies are actually the most optimistic in Europe when it comes to technology spending, with a 5.8 percent increase in investment planned for next year, compared to just 2.6 percent in France and 4.7 percent in the UK, according to the analyst firm.
"In Europe, the investment picture remains patchy, with only German organisations planning a noticeable increase in their IT budgets after several years of tight cost control," says Richard Jameson, managing director of NOP World Technology.
But although the NOP figures portray spending patterns for the UK and Germany that are opposite to Forrester's, the overall rise in spending figure for Europe is actually higher -- at 4.4 percent -- than Gartner (1.6 percent) and Forrester (2.6 percent). But NOP reserves its highest predictions for the States, with US IT investment rising by six percent stateside compared to 4.4 percent in Europe as a whole. "With recent macro-economic data in the US all heading in the right direction, corporate investment in technology appears to be holding up well," says Jameson.
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