Gartner: No spending slump in IT support services

While cost-conscious companies have slashed technology purchases in recent months, they do not plan to cut back on external hardware and software support services, according to IT research group Dataquest Inc., a unit of Gartner Inc.

In a report released Friday, Gartner Dataquest vice-president of IT services worldwide group Eric Rocco called IT industry support services “relatively recession proof,” noting that corporate users still need support for technology they have already purchased, despite slowing economic conditions that make new purchases prohibitive.

A survey of 250 organizations conducted by the research company revealed that 52 per cent of respondents expected to increase their spending on external hardware support services between 2001 and 2003, whereas 63 per cent of respondents expected to notch up spending on external software support services over the same period.

In terms of budgets, the average two-year increase in hardware support spending was 28 per cent, with an average 27 per cent increase slated for external software support. Just 13 per cent of surveyed companies said that they expect to decrease their spending on external hardware support, and five per cent said that they would shave spending on software support.

All this is good news for infrastructure support providers, Dataquest analysts said, who can expect to see continued growth in coming years.

The survey uncovered particularly auspicious opportunities for hardware manufacturers, who were the most popular sources of support. Thirty percent of respondents said that the most important support services to them were in the workgroup/LAN area, whereas 47 per cent said that storage device support topped their lists. The most important support attribute to hardware support users was a single point-of-contact, the report states.

Internet-based services also proved to be a popular sector, with 70 per cent of 177 respondents saying that they had used the services. This, said Dataquest analysts, shows that the money vendors invested in Web-based services was well spent. However, survey respondents said that they received satisfactory answers for their online inquiries only 52 per cent of the time.

This is number is too low, analysts said. One way to improve online service is for companies to train their customer service representatives to promote Web site use as well as teach customers how to use the online services, Gartner Dataquest senior analyst of IT services worldwide group Bob Igou said in a release.

Meanwhile, in related news, International Data Corp. (IDC) reported that worldwide IT spending between 2001 and 2003 could be US$150 billion lower than earlier forecasts if the U.S. economic slowdown spreads to Europe [see story – IDC: Global IT sales could be lower than forecast].

That scenario is becoming more likely as new economic data points to a more severe economic downturn in Western Europe, IDC said. This could lead to $50 billion less in demand for IT products and services from European customers, adding to the expected $100 billion shortfall in the rest of the world.

IDC currently predicts 11 per cent growth for the European IT market this year. But if the worst economic predictions turn out to be true, that growth may drop to as low as 7.9 per cent, IDC said.

Gartner Group has Canadian offices in Montreal Ottawa, Toronto, Calgary, Ottawa and Vancouver and can be reached at IDC, in Canada can be reached at