Forrester Research, Inc. (Nasdaq: FORR) estimates that IT spending will grow 4 percent in 2004. Despite the improving economic picture, 2004 IT budgets remain conservative — CIOs expecting, on average, a modest 1.7 percent budget increase from 2003. Forrester anticipates that an improving economy could unlock budget reserves in the latter half of 2004.
Forrester’s November survey of more than 800 technology decision-makers at North American firms reveals that the top budget priorities in 2004 include risk mitigation strategies that entail upgrades to security and disaster-recovery systems. Additionally, consumer sectors, eCommerce initiatives, and pent-up demand for servers and PCs will lead the way in IT spending for most firms.
Additional Key Findings
- Thirty-two percent of CIO respondents say that they will increase IT spending next year, compared with only 19 percent who will decrease spending.
- In addition to risk management, other spending priorities include long-overdue replacements of PCs and Windows upgrades.
- Infrastructure software will outpace demand for applications, while targeted outsourcing will carry the services market.
- The move to Linux and offshore outsourcing — two cost-savings initiatives — round out the bottom of the CIO priority stack.
- Firms noted the need to spend on technology to help comply with corporate governance mandates, such as Sarbanes-Oxley.
- Consumer-facing firms are spending more on technology. IT executives in retail, insurance, leisure and entertainment, and healthcare are expecting above-average growth. Producers of raw materials and chemicals and petroleum linger in negative territory.
To learn more about this Forrester Business Technographics® November 2003 North American Benchmark Study, please read the brief “CIOs Still Have A Cautious Outlook For 2004 IT Budgets.”
The research mentioned in this press release is available to Forrester WholeView™ clients and can be found at www.forrester.com.