Enterprises still spending on IT

Despite the lacklustre economic climate, enterprises and government organisations with more than 1000 employees increased IT spending by 3% between 2001 and 2002, reports In-Stat/MDR.

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By  Neil Denslow Published  March 30, 2003

Despite the lacklustre economic climate, enterprises and government organisations with more than 1000 employees increased IT spending by 3% between 2001 and 2002, reports In-Stat/MDR. The research firm also expects this segment to increase its IT spend this year, as well, mainly driven by the centralisation of corporate information and resources. This is expected to carry on for the next few years, primarily in the form of increasing connectivity requirements, such as remote access/VPN solutions, continued investment in systems, particularly more mobile client devices, and expanded use of managed services.

However, In-Stat/MDR cautions that growth will be mild for the years to come. “Regardless of the previous years’ trends, enterprise IT spending will rebound slowly, but steadily, through 2006. There is still too much uncertainty in the worldwide economic environment. This, combined with these customers’ changing requirements for mobility and need for improved information management and access, is expected to lead to cautious, hard-nosed IT investing in this market,” Kneko Burney, In-Stat/MDR’s chief market strategist.

As such, firms are expected to look for investments with a well defined, 12-18 month return on investment, especially those investments that can improve the efficiency of their core business operations or workforce productivity.

However, given the lagging economy and global events, addressing the IT needs of this market is likely to be a roller coaster ride, particularly short term. “For the time being, vendors targeting this market are encouraged to focus on solving the most essential, business-critical problems, like work mobility and access. In the medium- to long-term, these customers will begin to think more out of the box again in terms of IT planning, but are likely to continue to focus their resources on solutions that are modular in nature and address key business problems and/or enhance specific business processes,” says Burney.

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