IT Undergoing a Metamorphosis, Meta Says

Information technology (IT) organizations are undergoing a metamorphosis, moving away from traditional IT areas, spending less money and relying more on the Internet, according to the latest update of an annual report from market researcher Meta Group Inc.

Meta analysts will provide more details from Industry Watch 1998 during conferences in Orlando and San Diego next month. The Meta statistics are designed to allow IT professionals to compare their own data with that of other IT organizations in order to assess how they are doing and what changes need to be made to remain competitive.

Spending on traditional IT areas such as development and maintenance work are down 33 percent, while outsourcing of development, maintenance, networks, help desks, the data center and business processes jumped 42 percent in 1998 compared to the previous year, Meta found.

At the same time, spending on the Internet rose and is now at nearly the same level as traditional software development and maintenance. Of the 426 organizations surveyed in 21 areas of the private and public sector in more than 12 countries, Meta discovered that nearly 28 percent of IT spending is related to the Internet, intranets, networks and supporting hardware. Traditional software development and maintenance spending for 1998 was at 31.4 percent and data-center expenditures were just 8.5 percent.

The rate of increase in IT spending as a percentage of gross revenue has slowed, with expenditures hitting 7.1 percent of gross revenue in 1998, compared to 6.9 percent in 1997 and 5.1 percent in 1996.

It might not come as a surprise to IT professionals to hear that more is being demanded of them even as budgets drop. The average IT worker in 1995 had to support 38 non-IT staff members. That figure jumped to 52 last year, Meta said.

Consistent with other researchers, Meta found that year 2000 issues are the top concern of IT departments, followed by a desire to improve the quality of systems and services, the need to decrease costs and the goal of updating the technology infrastructure.

Meta Group, in Stamford, Connecticut, can be reached at +1-203-973-6700 or at

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