Enterprises may boost 2005 IT spend

Despite some apprehension about business next year, a US survey has suggested large enterprises will spend more in 2005 on IT.

A Forrester Research survey of about 1300 IT decision-makers in companies with more than 1000 workers suggested this week that US employer spending on IT may increase by an average of 3.9 percent in 2005.

A year ago, a similar poll found an average increase of just 1.7 percent.

"It affirms the seven percent increase in overall North American IT spending that Forrester projects for 2005," said Tom Pohlmann, director of research at the US firm, in a report accompanying the survey results.

"[That] includes spending by small and medium businesses, as well as spending outside IT departments."

Fifty-four percent of IT managers surveyed suggested they had a positive outlook for their businesses in 2005.

That was a 10 percentage point increase over last year's poll, and consistent, said Pohlmann, with the gradually increasing confidence that Forrester measured throughout 2004.

In the first quarter of 2004, 33 percent of the chief information officers surveyed described their current business climate as strong or very strong.

Security remained one of the top items scheduled for spending increases in 2005, noted Forrester, but was no longer number one.

Security had slipped on the priority list to number four, with last year's number three - deploying or upgrading a major software package - jumping to the first spot.

"Applications are the big winner for budgets in 2005," said Pohlmann.

Nearly six out of every 10 enterprises would pop for new or updated applications next year, compared to 54 percent that named security as a major theme for the year's spend.

Among the most popular applications for 2005, said Forrester, would be business intelligence and content management, the latter perhaps the "killer app" of the year.

Purchase plans for the category climbed 15 percentage points compared to 2004's plans, with 38 percent of North American companies saying they would invest in such solutions.

Also on the spending list for 2005 were replacing or upgrading PCs (37 percent of the companies said they named it as a priority) and upgrading Windows on the desktop (33 percent).

Other technologies of interest in 2005, said Forrester's Pohlmann, included server virtualisation and automated provisioning.

Server virtualisation specialist EMC bought VMWare early in 2004 and Microsoft finally entered the market with its Virtual Server 2005 in the US summer. Server virtualisation would be on 29 percent of the surveyed firms' buy list next year.

EMC/VMware held nearly a four-to-one advantage over Microsoft in that market.

Forrester estimated that about one in five corporate PCs will be replaced in 2005, with Dell remaining the clear leader as the most likely vendor.

HP has already gained on Dell this year, making up eight percentage points, and may make up more ground next year if the IBM sale of its PC unit to China's Lenovo Group disrupts the channel.

Linux aficionados should take heart: Forrester projected that 2005 will match Mac penetration in the enterprise, while it will blow by Apple's operating system in 2006.