Gartner Says European-Based Companies Plan to Boost IT Spending by Three Percent in 2006
Spending On Internal IT Staff Will Remain Flat
Egham,
UK
12 October 2005
-
European-based organisations plan to increase their investments in IT, but only
at the minimum level necessary to maintain their IT departments and support the
business, according to preliminary results from a recent survey by Gartner, Inc.
In a preview into this year's Gartner Symposium/ITxpo to be held in Cannes,
France, Gartner said that European companies plan to increase spending three
percent in 2006, a slight improvement from the 2.5 percent spending increase in
2005.
"The survey results show a cautious and constrained picture of IT spending in
Europe; it is not the spending recovery hoped for
by the IT community," said Roger Fulton, vice-president and distinguished
analyst at Gartner. "IT spending in
Europe is
closely aligned with gross domestic product (GDP) growth. Three of the four
major countries in
Western Europe are struggling to maintain economic
growth, which is linked to the limited growth in IT spending."
Throughout the year, Gartner polls more than 400 organisations within
Europe about
their IT spending intentions. Among the European Union region, IT spending plans
vary. "Companies in Germany, Spain and Portugal plan the largest IT budget
increases (up six percent) for 2006 followed by the U.K. and Scandinavia, which
aim at budget increases of less than four percent. In France respondents intend
to raise their budgets by only 0.5 percent," said Robert De Souza, principal
research analyst at Gartner. Companies in Belgium and the Netherlands intend to
reduce IT spending by approximately two percent.
The results show that spending on security hardware and software will see
healthy growth, although it is a relatively small percentage of the overall
budget. Portable devices such as mobile handsets, laptops, personal digital
assistants (PDAs) and tablet PCs will also experience healthy growth, while
desktops will exhibit minimal growth and servers will see a decline.
Within software spending, front-office applications and enterprise system
management will show positive spending patterns. Although front-office
applications will show growth, spending will often come from discrete budgets
that can be reduced at anytime, and this area remains the most vulnerable.
Within external IT services spending, consulting and IT training/education will
show the highest growth, caused by the lack of spending in previous years. Like
front-office applications, this spending is discretionary and can be the first
to be reduced if necessary.
The survey suggests that spending on internal staff will remain flat. "Organisations
plan as little as a two percent increase in IT staff costs and a reduction in IT
contractor spending as they try to manage costs," said Mr Fulton. "Respondents
in Europe will devote more of their staff budgets to project and programme
management, IT administration, and system and network management in 2006."