IT spending throughout Asia, Europe, and North America will continue to rise throughout 2006, with strong focus on security and business intelligence.
Posted May 4, 2006
Business leaders will adopt new technology focused on strategic business benefits as opposed to the infrastructure upgrades that have dominated IT budgets since 2003, according to the IDC study "Global Market Watch Survey 2006: IT Budget Trends and Priorities." As a result, the study predicts that security, BI, Web-based apps, and vertical industry solutions will represent the spending priorities of large enterprises in Asia, Europe, and the U.S. for the next year.
The survey of 300 enterprises in China, France, Germany, India, the United Kingdom, and the United States predicts that the IT market will remain stable throughout the remainder of 2006, assuming there are no major shifts in the global economy. In contrast to prior surveys, most firms surveyed expect IT spending to be spread evenly and without disruption over all four quarters. Of that spending, security topped the list of overall IT spending drivers, as firms expressed awareness of security risks and solutions to counter them. Although the infrastructure-upgrade spending spree passed its peak levels in 2005, the optimization of infrastructure, or upgrading an enterprise's IT department to keep up with current technology standards, remains a key influence on purchasing habits.
American firms are shifting their IT spending to solutions that enable companies to keep an eye on their business in real time. Spending will increase on BI solutions and Web-based applications to help answer these needs, according to the report. "U.S. companies want a strategic view of their business," says Stephen Minton, vice president of worldwide IT markets at IDC. "They're looking towards BI solutions and vertically focused applications to monitor their business, manage customer relationships, and enhance collaboration between departments."
In Asia, Indian firms are moving to adopt Web-based applications, driven primarily by security factors in the outsourcing industry. Chinese companies are spending most of their IT budgets on back-office applications. In Western Europe, large firms are adopting a steady approach to IT spending and adoption, but lagging the U.S. in most areas of new solutions. Firms in the U.K., France, and Germany also indicated a persistent policy of "good-enough computing," which continues to inhibit the pace of IT spending. "There is a danger that European firms are struggling to compete with strategic innovation from the U.S. on the one hand and low-cost competition from Asia on the other," Minton says. "Overall, many European companies remain inhibited by a slightly conservative approach to new investment, although overall spending is expected to increase from 2005."
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