IT Spending To Pick Up In 2nd Half, Surveys Find

Polls from two research firms don't predict a boom in spending, but do conclude that an expected boost later this year could indicate better times ahead next year.
IT spending will increase in the second half of 2002, according to survey results released Wednesday by IT research firms Gartner and Giga Information Group. Neither firm is predicting a boom in tech spending, but both conclude that the expected increase is a potentially strong indicator of better times to come next year.

The Gartner survey of 369 IT professionals, conducted this month in conjunction with Goldman Sachs Group Inc., shows spending will increase 1.5% for the rest of the year. Al Case, a Gartner senior VP, says companies underspent their IT budgets in the first half of this year, and the increase in the second half will essentially offset that. "The money is there to be spent, and companies will spend it," he says, adding that an upward trend in tech spending is important now as companies are beginning to set their IT budgets for 2003.

Giga also says businesses underspent in the first half of this year and should boost spending as the year progresses. The second-half increase will still leave overall spending on IT flat for the year, both firms agree. Last year, Giga had predicted a 4% increase in IT spending in 2002. But the research firm has revised those numbers in light of weak IT spending in the first part of this year. Giga analyst Andy Bartels says CIOs will loosen the IT purse strings and accelerate the spending in the third and fourth quarters.

Even flat spending for the year is good news. A March InformationWeek survey found that, although confidence in the economy and its impact on IT spending had increased 46%, only 38% of IT executives had positive feelings about spending in the next three months (see Optimism's Back!).