Despite the fears of an economic downturn in the US, spending on information technology and networks is not being reduced, according to a study of Global 2000 companies by the Gartner Group. The study found that 65 per cent of respondents expected to increase IT spending by 13.3 per cent in 2001. However, the slowing economy is forcing companies to choose products and services much more carefully, which will result in longer sales cycles and will have a negative impact on IT vendors.
Another IT spending survey from Network World found that a move to e-business is forcing almost half of the companies surveyed to invest heavily in their networks this year. Nearly half of all companies that spend more than $US500,000 on their networks each year will increase spending by at least 11 per cent, while one quarter will increase spending by 25 per cent.
Smaller companies are also increasing their investments, with 40 per cent of network budgets spent on capital equipment, 34 per cent of spending devoted to labour needed to run additional hardware and software, and 19 per cent of spending earmarked for outsourcing and services.