IT budgets for transportation industry slowly recover

After a disastrous 2001 and so far a dismal 2002, things may be looking up for the transportation industry and its IT budgets in 2003, according to findings Gartner released this week.

All varieties of transportation companies experienced a drop in IT spending down from 11 percent in 2000 to 6.7 percent in 2001, even before the terrorist attacks of Sept. 11, 2001. But that tragic day sent the air travel industry, in particular, into a tailspin that is barely recovering this year, Gartner says. The transportation industry represents about 4 percent of all global IT spending.

Air travel, along with motor freight, railroads, pipelines and maritime transportation companies, among others, will gain some momentum in 2003, and Gartner says the entire industry's IT spending will grow 7.2 percent to US$98 billion by 2005. The study also found that software and services would grow the most, at 11.4 percent and 10.7 percent respectively, while spending on hardware and networking equipment will be significantly less in the same period.

Gartner advises that vendors anticipating transportation companies' return to IT spending should focus on specific areas. Security applications, including biometrics, travel ID cards, and linked government and commercial databases, will be in demand if they truly can identify potential high-risk passengers. Also hot right now are customer relationship management applications and software that will help airlines, hotels and cruise ship lines better manage potential guests. The research also suggests IT vendors should make online reservations, shopping and purchasing sites easy to navigate and secure.

Lastly, Gartner recommends IT vendors work closely with standards bodies and government agencies to "influence and anticipate" new security-related standards.

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