Report: IT/IS Spending Bottoms Out

By Thor Olavsrud

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IT/IS spending in the U.S. and Europe hit rock bottom in 2001 and is expected to rebound in 2002, according to the results of a new survey released by INT Media Group Inc.'s CyberAtlas Research division.

In its report, "IT/IS Industry Forecast 2002: U.S. and Europe," available at CyberAtlas Research for $395, INT Media Group analyzes responses from identical surveys presented to two different panels of high-tech experts to determine what near-term priorities remain for U.S. and European CIOs in light of diminishing sales and constricting IT/IS budgets in 2001.

"Given current economic conditions, we anticipate that IT/IS capital spending in the U.S. and Europe will increase by about 2.4 percent next year," and Patricia Fusco, managing editor of CyberAtlas Research and author of the report. "European IT/IS budgets will be ratcheted up 1.5 percent during the first six months of 2002, but the U.S. market will remain soft, increasing less than one percent through the second quarter of 2002."

The report found that the U.S. and Europe will account for $414.3 billion in sales of IT/IS goods and services in 2001, and that the average Fortune 1000 firm will spend just under $50 million on IT/IS operations this year. The average SME, with annual sales of $15 million, is likely to spend about $765,000 on its IT/IS operations this year.

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But while modest increases over those numbers are expected in the first two quarters of 2002, Fusco said the outlook approaching the third quarter will be brighter.

"The economic outlook changes in the third quarter of 2002," she said. "IT/IS vendors that supply goods and services to the public sector will be the first to benefit from sales surges created by the federal government's implementation of Keynesian fiscal policies. Security and wireless endeavors will top the list of IT/IS spending initiatives early in 2002."

INT Media Group, which owns CyberAtlas, also owns CIN.Earthweb.com.

Editor's note: This story first appeared on InternetNews, an internet.com site. Read more summary data from the CyberAtlas report on IT spending in "The Roundup: Tech Spending Preps For Recovery."