IT budgets to fall

Spending on e-business technologies will fall in 2002, according to the latest figures from Forrester Research. The analyst house expects the average e-business technology budget to fall from US$ 41 million last year to US$ 29 million this year.

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By  Neil Denslow Published  April 2, 2002

Spending on e-business technologies will fall in 2002, according to the latest figures from Forrester Research. The analyst house expects the average e-business technology budget to fall from US$ 41 million last year to US$ 29 million this year.

Forrester bases its numbers on a survey of 900 IT and business managers from Global 3500 firms. The survey also showed that business executives expect IT budgets to fall by more than their IT colleagues do.

“Most companies will curb the number and types of technology products that they will consider buying in 2002,” says Tom Pohlmann, senior analyst at Forrester. “Compared with 2001, companies are much more risk-averse when considering new technologies, opting to make do with what they have before buying more.”

The results also suggest that 23% fewer firms than last year will consider purchasing basic items, such as servers, networks and storage hardware. In addition, more than 50% fewer will consider buying enterprise application software like CRM, ERP, supply chain and procurement.

However, vendors in the region remain bullish that the Middle East won’t follow this global drop in spending.

Yahya J. Kassab, business development manager, Red Hat Middle East, says that the area “is a region in development, it’s in the stage still of moving to the computer age. We believe that people are still looking into computerising a lot of things. There is [also] a lot of big projects supported by governments in the region and this is driving investment in software and computerising in general.”

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