IT chiefs more optimistic on budgets

IT executives are feeling much more optimistic about their budgets for the next 12 months.

According to analyst IDC's FutureScan survey for March, IT executives are now expecting IT spending increases of more than nine per cent, up from seven per cent last month.

But the analyst said that external market indicators, including revenue forecasts and macroeconomic trends, stayed the same as in February, suggesting much more modest IT spending growth between now and March 2006.

IDC forecasts spending growth for US IT of 5.6 per cent over the next 12 months.

"After several quarters of decent corporate profits, it seems buyers are hoping that some additional funds will trickle down into IT spending," said John Gantz, IDC's chief research officer.

"Although continued economic growth is clearly having a positive effect on the outlook of IT buyers, it's too early to tell whether these hopes will turn into reality."

Many companies are still in the throes of infrastructure upgrades, which will chew up about 40 per cent of this year's IT spending. The rest will be about evenly split between spending on new initiatives and spending on initiatives already underway.

"The user expectations this month just don't seem warranted, given macroeconomic conditions, vendor price wars, and the current conservative fiscal bent for most companies," added Gantz.