November 10, 2003 1:27 PM PST

Risky business to top 2004 IT spending

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Security and data disaster recovery rank among the top information technology priorities for 2004--a year in which overall technology spending is expected to remain cautious, according to a Forrester Research report released Monday.

North American IT budgets are expected to increase to $729.2 billion next year, up 1.7 percent from the level anticipated for this year, according to a survey of more than


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800 technology decision makers. Forrester itself says budgets could grow as much as 4 percent, as IT spending catches up with the economy.

"More firms are saying they expect their budgets to increase over last year. But I would not say the increase will be dramatic," said Tom Pohlmann, research director at Forrester. "We expect much of the growth to occur in the latter half of next year as the economy improves."

More than half the companies surveyed listed risk management initiatives as their top priority for next year.

Twenty-one percent surveyed listed upgrading disaster recovery systems as the critical theme for 2004, while 20 percent cited security upgrades. Thirty-one percent listed both areas.

Companies are also interested in upgrading their PCs next year, with 27 percent of those surveyed saying they expect to spend more--an improvement from 24 percent anticipated for this year. And the percentage of IT buyers who expect to spend less in 2004 declined to 24 percent, compared with 27 percent for this year.

Software licensing and development, meanwhile, will be a more challenging environment. The percentage of those anticipating a 2004 spending increase in those areas fell to 30 percent, compared with 35 percent for this year. Meanwhile, the percentage of IT buyers expecting to decrease spending rose to 18 percent for next year from 14 percent for 2003.

Although most companies are anticipating upgrades or a major applications deployment next year, any rollouts will likely span a long period of time, resulting in a decline in anticipated applications budgets next year, Pohlmann said.

 

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