IT spendings up, CIOs say

IT spending projections for 2006 continue to improve after a dip last fall, according to the monthly CIO Magazine Tech Poll released Monday.

CIOs are now predicting that their IT spending will increase by 7.8 per cent over the next 12 months, up from predictions in November that it would rise 5.7 per cent this year. CIOs in October had projected that IT spending in 2006 would rise by 5.2 per cent.

“We know that [predicted] spending jumped to 7.8 per cent, which is a nice uptick from the month before, but the companies that have 5,000 or more employees claim their budgets are going to increase 8 per cent in the coming year,” said Gary Beach, group publisher at CXO Media Inc. in Framingham, Mass. “In this poll, we asked respondents to compare their forecast for spending in 2006 to the weather — if it’s sunny, that means they’ll spend more in 2006 than in 2005, and overall, 15.4 per cent of the respondents said that the forecast was sunny.”

Beach said that could be a very good sign for the overall tech industry in 2006. When asked about spending in eight categories, 50.9 per cent of respondents said they plan to increase spending on security software this year, down from 53.2 per cent who said that in November, Beach said. In addition, 49.7 per cent of the CIOs surveyed said they planned to increase spending on storage in 2006. That figure is up from 49.1 per cent in November.

Despite the upbeat projections on IT spending, Beach said he is still concerned about the difficulties that CIOs at companies with 5,000 or more employees are having with finding and keeping IT workers.

“About 20 per cent of overall respondents say it’s hard to find and keep IT personnel, but when you look at the largest companies, 36 per cent of them are saying that it’s hard to find and keep IT labour. That’s been pretty consistent for the last six months,” Beach said.

Finally, Beach said, the IT industry has recovered from the shock of hurricanes Katrina and Rita and is getting ready to attack a significant application backlog the survey reported last month.

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