The overall IT market held its own with a relatively small sales decline of five per cent in the first three months of 2003, despite the war in Iraq, the Sars outbreak and lingering economic fears, analysts said yesterday.
According to market research firm Techtel, for the first time since the end of 2001, during which time spending increases were generally in the low-end, less risky IT categories, high-end IT spending increased.
"The good news is that the IT sector managed to get through a challenging quarter intact," said Michael Kelly, chief executive of Techtel.
"Economically and politically, we've been through the perfect storm, and the industry has apparently weathered it with remarkably little negative effect."
The Q1 2003 Techtel Demand Index indicated that enterprise IT spending entered an upward trend, with the high-end enterprise technology category experiencing an increase in actual purchases.
"After 9/11, we saw a shift to low-end categories as companies moved IT spending to low-risk, short term ROI categories, such as PCs and notebooks. This is the first quarter where the more expensive stuff is being purchased," said Kelly.
"While this does not yet establish a trend, it does suggest that underlying economic improvements are beginning to shore up IT investment."
The analyst predicted that small-sized companies, those with 250 or less employees, especially those in business services, may be the bright spots in IT spending with a more positive outlook than the large companies.
Techtel found that 45 per cent of respondents in this category indicated that spending would remain the same, with another 25 per cent seeing an increase.
But larger firms had a gloomier view, with 35 per cent saying that they did not plan to increase IT spending in the next year.
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