InformationWeek

January 8, 2001

Editor's Note:
Spending Plans Reinforce Tech Value

Stephanie Stahl here's a new phobia going around. Perhaps you've seen people affected by it. Perhaps you're even suffering from it. Here are the symptoms: unread morning newspapers are stacking up in the box outside your house; you pop in one of your favorite CDs during your commute to work instead of listening to the morning news; your daily E-mail newsletters go unopened; you sit down for a quiet family dinner in the evening instead of eating and watching the news at the same time. It's a fear of the news--or, more specifically, bad news.

Every day for the past few months seems to have brought bad news about the economy. It's slowing, it's weakening, the "R" word has been mentioned, the stock market is schizophrenic, consumer confidence is down, retail spending is slow, and on top of it all, that dried-up Christmas tree is still sitting in the middle of your living room shedding its needles.

But while tech stocks have dragged the Nasdaq down in recent months as a number of prominent vendors have released disappointing earnings, there is good news on the IT front. Seriously. According to InformationWeek's Outlook For 2001 Study, 72% of respondents say IT budgets at their companies will increase in 2001. On average, IT spending will represent 8% of revenue. Now, we're not so naïve as to think that these budgets are set in stone or that CEOs won't take the scissors to them should the economy really take a radical turn for the worse. But 8% in the existing climate is extremely healthy. Heck, it's healthy for an economically strong year. Such aggressive spending reinforces just how critical technology is to businesses of all kinds.

As part of our study, we also rank IT managers' technology and business priorities, something all vendors, consultants, and technology investors will want to pay attention to. (See full story by senior writer Marianne Kolbasuk McGee.)

Also in this week's issue, we send a letter to President-elect George W. Bush. Written by senior editor Diane Rezendes Khirallah following a roundtable discussion with IT and business executives hosted by InformationWeek, the letter urges Mr. Bush to make technology a top priority. While tech issues were on the back burner during the campaign, it's clear from our readers that issues surrounding privacy, security, and education need to be addressed. This isn't a request for more regulation. Far from it. Rather, it's an appeal to improve collaboration between government and private industry and to appoint a leader who can provide insight and guidance on the strategic role technology plays in business.

Stephanie Stahl
Editor
sstahl@cmp.com

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