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Gartner Says U.S.-Based Businesses Plan to Increase IT Spending 5.5 Percent in 2
Posted by randy on: 2005-10-16 13:17:31
Gartner Says U.S.-Based Businesses Plan to Increase IT Spending 5.5 Percent in 2006; Organizations Plan for Small Increase in IT Staffing Budgets
STAMFORD, Conn.--(BUSINESS WIRE)--Oct. 12, 2005--U.S. organizations plan to increase IT spending by 5.5 percent in 2006, and some of this increase will go toward a renewed focus on application development and integration, according to preliminary results from a Gartner, Inc. survey.
Spending on security and storage will level off in 2006, but mobile devices will become a major purchasing priority. Increasing emphasis will also be placed on development tools and middleware.
"Despite the spending increase, the message to IT managers is clear: you must continue to improve the efficiency of established IT investment areas if you want to fund substantial growth in IT or add IT professionals to the workforce," said Barbara Gomolski, research vice president at Gartner.
More than 1,500 U.S.-based IT managers were surveyed from June through August of 2005 regarding their 2006 IT spending plans. Based on these results it appears the job market in the IT industry will remain challenging. Organizations plan only small increases in their IT budgets, and they plan reductions in their budgets for IT contractors.
"In terms of staffing priorities, respondents said they would devote more of their staff budgets to project and program management, IT administration, and system and network management in 2006," Ms. Gomolski said.
The largest budget increases are planned in the small and midsize businesses (SMBs). Organizations with 20 to 99 employees plan to increase their IT budgets by 7 percent in 2006. Larger organizations, firms with 500 to 999 employees, plan IT budget increases of 2.4 percent.
In terms of industries, the service sector will see the largest year-over-year increase with plans for an 11 percent increase in IT budgets for 2006. No other industry plans double-digit IT budget growth in 2006. Organizations in the financial services sector plan to increase their 2006 IT budgets by 3.4 percent.
"On the surface, these results paint an optimistic picture of long-awaited IT spending recovery, but the increases involved are relatively modest," Ms. Gomolski said. "Many industries will see revenue growth outpace IT budget increases in 2006. As a result, although absolute dollars spent on IT will increase in 2006, IT spending as a percentage of revenue will actually decline in some organizations."
Throughout the year, Gartner polls more than 2,000 organizations worldwide about their IT spending plans. More detailed results of these studies will be available in the 2005 IT Staffing and Spending survey, which will be published shortly, and in the IT Worldwide Benchmark Report, which will be available in the fourth quarter of 2005.
Ms. Gomolski will provide additional analysis on the IT industry during the upcoming Gartner Symposium/ITxpo, which is being held October 16-21 in Orlando, Florida. Gartner Symposium/ITxpo is the IT industry's largest and most strategic conference, providing business leaders with a look at the future of IT. For more than 10,000 IT professionals from the world's leading enterprises, Gartner's annual Symposium/ITxpo events are key components of their annual planning efforts. Attendees rely on Gartner Symposium/ITxpo to gain insight into how their organizations can use technology to address business challenges and improve operational efficiency. Additional information is available at www.gartner.com/symposium/us.
About Gartner
Gartner, Inc. (NYSE: IT) is the leading provider of research and analysis on the global information technology industry. Gartner serves more than 9,000 clients, including CIOs and other senior IT executives in corporations and government agencies, as well as technology companies and the investment community. The Company focuses on delivering objective, in-depth analysis and actionable advice to enable clients to make more informed business and technology decisions. The Company's businesses consist of Gartner Research and Events for IT professionals; Gartner Executive Programs, membership programs and peer networking services; and Gartner Consulting, customized engagements with a specific emphasis on outsourcing and IT management. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, and has over 3,900 associates, including more than 1,200 research analysts and consultants in more than 75 countries worldwide. For more information, visit www.gartner.com.
Contacts
Gartner, Inc.
Tom McCall, 408-468-8312
tom.mccall@gartner.com
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