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SAN FRANCISCO – The nation’s CIOs expect IT budgets to grow 5.1% during the next 12 months, down from 5.8% in December. The weaker results reflect increased caution across most product categories, although a rebound in large enterprise spending is expected, says Deutsche Bank Equity Research. DB’s March poll revealed a slow start to 2007, although results for very large (>5,000 employees) and small firms (101-500) strengthened in March, with CIOs expecting growth of 7% and 10%, respectively, in the next 12 months (vs. 3% and 7% in December).

Medium-sized firms (501-1,000) were cautious, expecting 4% growth (vs. 9% in Dec.), while large firms (1,001-5,000) and very small firms (1-100) were less optimistic with CIOs expecting 3% and 2% growth, respectively, (vs. 3% and 9% in December).

Data networking was the top spending priority in the poll, with 48.4% of respondents planning to increase spending, (vs. 35.3% in December). Storage systems were next, with 46.3% of respondents planning to increase spending (vs. 52.9% previously), followed by computer hardware at 45.5% (vs. 55.8% previously).

Medium-sized companies led results for storage and computer hardware for the second consecutive quarter with 62.5% of medium-sized companies (vs. 70% previously) predicting increased storage budgets. In addition, computer hardware was also a priority for medium-sized firms, with 56.3% (vs. 63% in December) of CIOs expecting increased spending. Almost half (46.3%) of panelists said they would spend on upgrading the existing storage infrastructure, while 17.9% of respondents will spend on disaster recovery and 10.6% on backup.
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