After several years of cost conservatism, the IT sector is shrugging off its budgeting shackles and pushing ahead with Web 2.0 technologies and Web applications and services.

Our InformationWeek 500 survey shows that, for IT vendors, it's a time of growth. Sixty-five percent of IT companies expect their IT spending this year to exceed last year's. And more of that money is going to new projects--43% this year compared with 38% last year.

"A lot of the past two to three years has been about the cost controls," says Steven Birgfeld, CIO of outsourcer CompuCom Systems. "Now it's about moving forward with the innovation aspects."

The survey shows IT companies are less concerned with increasing productivity--only 16% say they're upgrading their desktop productivity software. What they're focused on is innovative technologies, with 60% of respondents using wikis, blogs, and other social networking tools for external dialogs. Almost three-quarters use Web-only applications, and 68% widely deploy Web services.

CompuCom, for example, is beyond the pilot stage with Web 2.0 technologies such as wikis and blogs. At first, the company used the technologies within teams to share information about best practices or tools. Then employees started using them to communicate between teams. This month CompuCom plans to go outside its virtual walls and use wikis and blogs to communicate with its clients.