Boston Ñ March 10, 2003 Ñ In a potential sign of relief for the hard hit software industry, a new survey of chief information officers and other information technology purchasing decision makers indicated that, despite lowered expectations for IT budget growth, more enterprises have begun considering new application purchases, although they have not moved into a formal evaluation or purchase process yet.
In the survey, conducted in January by technology consultancy Aberdeen Group, CIOs identified their "intent to purchase" and "priority of purchase" for application software, technology infrastructure, hardware and services.
Compared to a similar survey Aberdeen conducted in September, the average "intent to purchase" for 35 application categories combined increased, while the average priority to purchase decreased over the same timeframe.
Aberdeen's analysis of this data is that more organizations are considering new application purchases but have yet to move into formal evaluation or purchasing processes. This is a potential early indicator of a recovery in the business application sector, the consultancy believes.
Overall, the survey indicated that enterprises expect to increase their technology budgets by an average of 2.7 percent over the next six to 12 months. That's a drop since the September survey, in which CIOs anticipated an average increase of 3.7 percent in the subsequent six to 12 months.
In the latest survey, the top three application categories (out of 35) with a positive intent to purchase were content/document management applications; query/reporting/analysis; and project management. For each of these categories, more than 50 percent of respondents indicated a positive intent to buy.
Just under 30 percent of respondents said they were looking at procurement software or partner relationship management applications, while about a quarter of respondents indicated a positive intent to buy supply chain management software.
Around 20 percent of enterprises were considering distribution and logistics systems, collaborative product commerce applications or e-sourcing solutions, while demand planning systems ranked near the bottom of the pack with just over 10 percent of respondents indicating a positive intent to buy.
Customer service and support applications ranked as a "high priority" for more than half of the respondents, while about a quarter of respondents pegged supply chain management software as a high priority for their enterprises.
"The survey results show that IT spending growth will continue to be slow and incremental over the next six to 12 months," said Hugh Bishop, Aberdeen senior vice president and author of the new report. "This data is in line with Aberdeen's forecast that worldwide IT spending will increase approximately 4 percent in 2003 and is closely tied to [gross domestic product] in capital spending metrics."
In the January survey, the top three technology infrastructure solutions with a positive intent to purchase were application development tools; security gateways and services; and enterprise application integration software. Also, with the exception of mainframes, CIOs expect to increase spending in all hardware categories during 2003. The most optimistic forecast is that for servers.
Among services offerings, IT outsourcing was the winner, with 1.8 percent expected growth.
The survey data are highlighted in a new Aberdeen report, Technology Forecasting Consortium: 2003 User Buying Intentions, which is based on a recurring survey of IT executives in the Technology Forecasting Consortium (TFC), Aberdeen's end-user advisory council that assists in the early identification of trends in the IT market and the prediction of user buying intentions.