Gartner: Small increase in software spending this year

Worldwide spending on software will increase 3.5 percent this year to US$76.1 billion from US$73.5 billion in 2002, with buyers still cautious when spending their software budgets, Dataquest Inc., a unit of Gartner Inc. said Monday.

This year and next, companies will invest primarily in software that helps get the most out of earlier investments and cut business costs. Vendor options will be thoroughly reviewed before a deal is signed, which benefits large vendors purely because of financial viability, according to Dataquest.

The software market has gone through stormy weather over the past two years, with large seasonal swings and a 0.7 percent spending decline in 2002 compared with 2001. This year, a survey shows that chief information officers expect no increase in software budgets over last year, but an investment burst in the end of the year will help the market to some growth, according to Dataquest.

Questions about viability of some of the smaller and pure play vendors have helped large vendors selling suites of products win 5 percent in market share over the last eight quarters, according to Dataquest. Smaller pure-play vendors include Ariba Inc., BEA Systems Inc. and Blue Martini Software Inc. Examples of large players are Microsoft Corp., Oracle Corp., PeopleSoft Inc. and Siebel Systems Inc.

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