CIO survey: IT spending projections down for 2007

IT spending projections decreased in the last quarter of 2006, with CIOs predicting IT spending increases of 5.8% over the next 12 months.

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IT spending projections decreased in the last quarter of 2006, with CIOs predicting IT spending increases of 5.8% over the next 12 months.
The predictions are down from expectations in the previous quarter that spending would rise by 6.5% during the next year, according to the quarterly CIO Magazine Tech Poll, released on Friday 29 January.

Almost two-thirds of the CIOs surveyed (63.6%) had no plans to invest in Microsoft Office 2007 or the new Windows Vista operating system in the next year. But they do plan to invest in computer hardware, storage and security.

"This forecast decline in tech spending is in sync with other recent reports suggesting businesses will scale back capital spending in 2007," CIO Magazine publisher Gary Beach said in a statement.

"However, with nearly two-thirds of CIO respondents indicating plans to focus on either growth or innovation in 2007, the question for CIOs remains how to implement these agendas with budgets that are largely flat."

CIOs said their IT budgets had increased by an average of 5.8% over the last 12 months. In the CIO Tech Poll released three months ago, CIOs said their budgets were up an average of 5% over the previous year.

When asked about spending across eight specific IT categories, the percentage of CIOs who said they planned to boost spending over the next 12 months was 40.7%, up slightly from 39.7 percent in September. The percentage of those who planned to decrease spending remained essentially flat at 13.7%.

Computer hardware is the top spending priority among CIOs surveyed for the poll, with 55.8% planning to increase spending in that area, compared with 46.9% in September. Only 11.7% planned to decrease spending in the year ahead, compared with 16.3% who said they intended to reduce spending in September. Storage systems and security software were other areas where CIOs expected to spend more money in the coming year.

The supply of labour has tightened, with 5.8% of respondents reporting that IT professionals were “plentiful”, compared with 6.2% in September, while 56.7% said IT staff were “available”, down from 59% in September. More than a third of CIOs (35%) reported that IT professionals were “hard to find”, compared with 31.1% in September, the survey found.

Of those eyeing potential upgrades to Vista or Office 2007 in 2007, 20.7% said they needed to evaluate pricing and user training costs before considering any such move. Of the 15.8% of CIOs who said they would upgrade, 8.3% planned to upgrade to both, while 5.8% said they would only upgrade to Office 2007 and 1.7% said they would only upgrade to Vista.

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