CIOs Ready To Replace, Upgrade 1 In 4 PCs

Financial and insurance companies are most likely to upgrade, according to a survey.
PC upgrades are high priorities for both big and small businesses for the remainder of 2004, a research firm said Thursday.

About one in four U.S. business PCs will be replaced or upgraded in the next 12 months, Forrester Research senior analyst Nicholas Wilkoff says.

That figure is in line with long-term trends of businesses investing in basic infrastructure such as desktops and laptops, often spurred by the need to replace aging systems purchased in the two-year run-up to 2000. At that time, many companies made sweeping replacements of PCs in anticipation of the Y2K problem.

"This isn't out of the ordinary or overly shocking," Wilkoff says. "Since the beginning of the year, we've been watching enterprises focus on getting back to the basics, such as upgrading security, upgrading Windows on the desktop, and upgrading PCs.

At the midyear point, Wilkoff says, an overwhelming majority of both large and small companies said they would replace or upgrade at least some of their systems. Nearly 90% of enterprises said they would cough up cash to update hardware, and 95% of small businesses said they would do the same.

Splitting the numbers into vertical-market sectors, Wilkoff says that financial and insurance companies were most likely to upgrade: 31% of those firms surveyed said they had PC replacement plans.

Increasingly, those replacement machines are portables. Twenty percent of the new PCs used by utilities and telecommunication firms will be laptops, Wilkoff says, while 17% of those updated in government will be notebooks.

It all should mean smiles in Round Rock, Texas. According to Wilkoff's survey, 79% of the small businesses and 57% of the enterprises planning to upgrade or replace end-user PCs will purchase them from Dell.

The minor buying spree is another indication of the cautious and conservative growth in IT spending that Forrester has been tracking, Wilkoff says. "I don't see this as an indication of any big turnaround, but it's certainly moving in the right direction."

Other indicators that companies are continuing to loosen the purse strings--even in the face of disappointing performances by some technology firms this quarter--include an increase in the percentage of budgets going to new investment and a slight boost in research and development spending.

"There are some positive signs" of growth, Wilkoff says. "But it's conservative growth."

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