Posted by : bpburnwal on Dec 17, 2003 - 01:21 PM General

Small and medium-sized businesses will lead the IT spending recovery next year, research has predicted.
Security, storage, wireless local area networks, Linux and business intelligence software will be the top priorities for IT spending in 2004, according to a survey by Gartner and SoundView Technology Group.

The survey of 600 IT executives, conducted in late October at the US Gartner Symposium/ITXpo, found that IT spending confidence has improved "substantially" from a year ago.

It also showed that IT spending priorities are returning to more traditional patterns, with software taking precedence over hardware. New project and infrastructure spending priorities are reaching equilibrium again.

IT executives said their capital spending budgets will begin to grow again at a modest pace of 1.6 per cent in 2004.

Steve Wood, managing director of reseller Parity, said: "There is an air of confidence locally. People have been sweating their assets since 1998-99 and they've come to recognise that they are running their businesses on these systems and there's no point holding on forever.

"There's a lot of confidence in the local market and it's the smaller customers that we're seeing moving initially."

Dale Vile, service director at analyst Quocirca, told vnunet.com: "The supplier landscape is changing for smaller companies.

"There's a lot of technology that has become accessible to them as the barriers to entry to voice over IP or customer relationship management have lowered, so there is more room for movement."

Gartner's research warned that for larger companies the IT budget outlook is flat to declining next year.

But Quocirca's own research into larger companies found they were optimistic about 2004. "In terms of IT budgets there's an indication that there will be a marginal increase in spending," said Vile.

Hardware and software spending is likely to increase slightly next year, but spending on networking and management consultants is likely to drop, he predicted.