Friday, March 11, 2005
IT Spending Trends in North America: "Published: March 10, 2005
(After March 17, 2005, this article will only be available to eStat Database subscribers.)
Although optimism about future business prospects has moderated, Forrester Research's newest quarterly survey of CIO confidence signals that IT spending in North America is likely to expand this year.
Just under one-half of North American CIOs surveyed expect to outspend their current IT budget or get new funding as the year progresses, compared to 29% who say it is too early to tell, and 26% who feel that spending beyond the current budget will not occur. This is an increase from the first quarter of 2004, when only 25% of CIOs expected to outspend their IT budgets.
But a report by Ipsos-Reid indicates that the IT spending forecast is not as sunny in colder parts of North America. Ipsos-Reid finds that IT spending by businesses in Canada is declining, falling from about $46.7 billion CAD in 2003 to around $44.6 billion CAD in 2005. Declines will be in the applications, hardware and infrastructure sectors, while services will remain about the same and security spending will increase.
At the same time, the outsourcing of IT needs has risen from 2003 levels, with 49% of IT spending being outsourced in 2005 compared to 44% in 2003. Ipsos-Reid notes that the combination of declining IT spending and increased outsourcing will result in a buyers market that will challenge vendors.
As noted in the recent article Slower Growth For IT Budgets, the last survey from CIO Magazine, conducted in January 2005, found that chief information officers in the US expected IT spending to increase about 5.4% over the coming year. However, expectations for growth were lower in January 2005 than a year earlier. "
(After March 17, 2005, this article will only be available to eStat Database subscribers.)
Although optimism about future business prospects has moderated, Forrester Research's newest quarterly survey of CIO confidence signals that IT spending in North America is likely to expand this year.
Just under one-half of North American CIOs surveyed expect to outspend their current IT budget or get new funding as the year progresses, compared to 29% who say it is too early to tell, and 26% who feel that spending beyond the current budget will not occur. This is an increase from the first quarter of 2004, when only 25% of CIOs expected to outspend their IT budgets.
But a report by Ipsos-Reid indicates that the IT spending forecast is not as sunny in colder parts of North America. Ipsos-Reid finds that IT spending by businesses in Canada is declining, falling from about $46.7 billion CAD in 2003 to around $44.6 billion CAD in 2005. Declines will be in the applications, hardware and infrastructure sectors, while services will remain about the same and security spending will increase.
At the same time, the outsourcing of IT needs has risen from 2003 levels, with 49% of IT spending being outsourced in 2005 compared to 44% in 2003. Ipsos-Reid notes that the combination of declining IT spending and increased outsourcing will result in a buyers market that will challenge vendors.
As noted in the recent article Slower Growth For IT Budgets, the last survey from CIO Magazine, conducted in January 2005, found that chief information officers in the US expected IT spending to increase about 5.4% over the coming year. However, expectations for growth were lower in January 2005 than a year earlier. "
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