Global IT spending on the rise

Global IT spending will increase by five per cent in 2005, fuelled by rising energy costs and the pursuit of productivity gains to offset increasing competition from India, China, Brazil and other emerging economies.

According to Gartner, firms are increasingly turning to IT investment in a bid to maximise effectiveness and deliver against profit expectations.

Peter Sondergaard, global head of research at Gartner, said: "[Companies] face greater uncertainty than ever in anticipating world events as well as rapid changes in markets and competition."

He added that wireless connectivity and consumer demand for products such as gaming machines, plasma screens and related video technology, continues to outpace demand from businesses as the primary influence on innovation and new investment by hardware manufacturers.

"Next year there will be 30 new companies offering voice over IP services to consumers in North America," said Sondergaard.

These companies will be "competing with traditional suppliers that you rely on, and those suppliers are going to have to change dramatically to stay in business".

For IT managers, advances in key technologies will create opportunities for further reductions in labour costs. These advances include server consolidation, which reduces maintenance requirements.

Virtualisation technology and real-time infrastructure, which enhances data collection, analysis and response times, will also enable efficiency gains.

"The biggest challenge for IT management is dealing with all this fluidity," said Sondergaard. "We have to get better at dealing with uncertainty. We have to support that 'sense-and-response' cycle that underpins the real-time enterprise."