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CIOs to Spend Less on IT in 2001

A recent report by Morgan Stanley Dean Witter confirmed some of the computer industry’s concerns about a slowdown in corporate IT spending. The year-end survey of 150 Fortune 1000 CIOs revealed that CIOs plan to scale down IT spending for 2001.

On average, the respondents indicated that their IT budgets would grow eight percent in 2001, down from the 12 percent increase in 2000. Sixteen percent of the CIOs said their IT spending would decrease in 2001. Due to concerns about the economy, 14 percent of the respondents said they would spend less money in the first half, electing instead to spend the majority of their budget in the second half. Twelve percent said they reduced their IT budgets because of the current industry conditions.

Compared to last year, the CIOs listed e-commerce software, supply chain applications, and application servers as the areas they will most increase spending. The demand for Unix servers is expected to remain strong, as the results indicated that spending on Unix servers will outpace the overall eight percent budget increase. On the down side, mainframe and consulting spending will decrease in the next year.

Overall, forty percent of IT budgets are earmarked for external spending, with hardware comprising 30 percent, services comprising 25 percent, communications comprising 23 percent, and software accounting for the final 22 percent. – Jim Martin

About the Author

Scott Bekker is editor in chief of Redmond Channel Partner magazine.

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