The UK will be the fastest growing IT market in Europe next year, with spending forecast to grow 6.2 per cent.
Enterprise resource planning, content management and web services will benefit most from the higher spending, according to a recent study by Forrester Research.
Senior Forrester analyst Charles Homs stated that UK spending grew 6.5 per cent in 2003, and is due to grow 6.2 per cent next year.
"This will accelerate the IT outsourcing boom and enable large firms to make investments in new projects, without lifting the grey clouds hovering over consultants and systems integrators," he said.
In 2004, large UK firms expect to allocate 39 per cent of their budgets to outsourcers, compared with 32 per cent in 2003.
"Firms with smaller headcounts have more cautious outsourcing plans. But even in the booming UK market, consulting and systems integration cannot expect a lift," said Homs.
"Few UK firms surveyed plan to increase their outlay on consultants, and IT services firms will receive only 10 per cent of IT budgets in 2004."
IT staffing will stabilise in the UK, except for firms with more than 5,000 employees of which 38 per cent will cut back.
In contrast, mid-sized firms will increase IT head count on aggregate. Some 23 per cent will hire and just eight per cent will lay off workers, a clear sign of confidence.
Fifty per cent of UK firms surveyed anticipate spending more on application software, with just 23 per cent cutting back.
Storage hardware and server hardware will also benefit from increased IT spending plans, with 38 and 30 per cent of firms planning to spend more respectively.
Employee portals were found to have achieved high penetration in the UK market and will become more common, as 30 per cent of firms are involved in a rollout or upgrade.
Content management software is, according to the study, the hottest category, with a whopping 49 per cent of UK firms considering a purchase.
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