Mixed signals for IT spending

 A survey of 100 chief information officers of Fortune 1000 companies in August has revealed that their expectations on technology capital spending have eroded slightly.

 However, vendor pricing, a critical component in a tech recovery, is showing the most promising evidence of bottoming so far this year, the firm said.

 While describing the current spending scenario as "stable-to-improving," the CIOs surveyed indicated that frugal spending habits will stay for some time.

 Most companies are spending at or near previously budgeted levels. But that could be significantly more than last year's under-spending.

 An earlier IT outlook survey by the firm released in January this year had indicated average business spending on computer hardware and software will decline by 1 percent this year compared with last year.

 The latest survey predicts that in 2004, technology capital spending could outpace overall IT budget growth.

 Although sentiment eroded slightly from June's results, CIOs now expect overall IT budget growth of 2.3 percent over 2003. For technology capital spending, the panel expects growth of 3.9 percent over 2003.

 "Some users are thinking in terms of double-digit technology capital budget growth after three years of austerity, although most users' IT outlook is still fairly constrained. For now, the most prudent assumption is for a very modest but not miraculous improvement," Goldman Sachs observed.

 Nearly half of those surveyed are postponing expectations for a pickup in tech spending to the second half of 2004 or beyond.

 The survey also ranked software and hardware vendors as recipients of IT spending. Dell and IBM continue to rank highest among hardware vendors.

 In storage, StorageTek and Hewlett-Packard rise in the rankings, along with EMC and IBM. Both network-attached storage and storage networking have moved into the top tier. NAS had not appeared in the top tier in four surveys, and storage networking has not placed among the top priorities since February.

 In software, Red Hat, Microsoft and Symantec remain at the top, joined by systems management vendors, Mercury Interactive and BMC Software.

 In association with ZDNet India