The decline in European IT spending has bottomed out, but will remain flat until at least the middle of next year.
According to research conducted by analyst Gartner, the number of companies planning to reduce IT budgets this year has fallen nine per cent from last year.
Steve Prentice, European director of research at Gartner, explained: "We are seeing a levelling out in the sense that the number of companies planning to reduce their IT budgets has dropped.
"We have reached the bottom, but spending is going to stay flat through 2003. We are still in the tunnel but we can see the light."
Those organisations that are still spending money are concentrating on improving existing infrastructures rather than splashing out on new technologies, but there is no real set pattern.
"I'm surprised how varied spending is," said Prentice. "But the major area is one that we have categorised as integration and consolidation products. Organisations are basically playing catch-up."
Consolidation will continue to prevail within the IT sector in the coming months and years, with Prentice predicting such activity "across the board".
We should also be prepared for more mega-mergers such as that between Compaq and Hewlett Packard (HP).
"It's difficult to think of further mergers on this kind of scale, but we certainly wouldn't rule it out. A year ago we would have ruled out Compaq and HP as unthinkable," he concluded.
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