Study: Global IT spending to fall next year

IT spending by companies worldwide in 2002 will be slightly lower than in 2001 – the first time a decrease has been recorded, according to researcher Meta Group Inc.

The main reason is the global economic downturn, which has begun to affect corporate IT spending, practices, and performance, Meta said in its report “Worldwide IT Trends & Benchmark Report 2002,” released Tuesday. The report used information gathered from over 18,000 IT contacts worldwide, Meta said.

Cambridge, Mass.-based Meta estimates that IT spending by U.S. businesses will fall by between two per cent and five per cent next year, compared to an eight per cent increase in 2001. Outside the U.S., IT spending will be flat next year compared to a six per cent increase this year, Meta said.

However, An IT market survey released last week, conducted by Toronto-based IDC Canada, provided a more optimistic outlook for Canada. It predicted Canadian IT spending would grow 3.5 per cent for the remainder of this year, and five per cent next year. That would mark an estimated $10 billion drop from earlier spending projections, according to IDC.

A recent survey showed that 50 per cent of chief information officers (CIOs) worldwide have already reduced their budgets to adjust for the economic climate, but that they are still spending on Web-based technologies such as customer relationship management (CRM) and electronic commerce projects, emphasizing data centres, operations, and infrastructure development, Meta said.

Other conclusions from the survey include:

– IT staff workloads increased last year as companies cut their workforces and programmers produced an average of 50 KLOCs (thousand lines of code) compared to 42 KLOCs in 2000.

– just over half of IT development worldwide is done in a Windows environment targeted at networked workstations.

– C++ and Java are still the programming languages of choice, although use of simpler languages such as HTML, JavaScript, and Visual Basic has enhanced productivity.

– investment in IT training worldwide has risen again, with companies averaging 9.05 training days per year, up from 8.44 in 2000.

– IT salaries in the U.S. is up nine per cent this year, compared to 6.6 per cent in 2000, with the greatest pay increase for project leaders, business analysts, and metric specialists. IT salaries outside the U.S. are generally much lower.

– IT staff turnover rates decreased both in the U.S. and worldwide.

– among the hardest jobs to fill worldwide were systems analysts and designers. Database analysts and support programmers were comparatively easier to recruit.

As companies keep their “run-the-business” portion of their budgets intact, while cutting into discretionary spending, increased productivity has become the top priority for U.S. companies, while outsourcing and business process engineering have become the lowest priority items. But although productivity rose rapidly last year, this overburdening of IT staff cannot be made to continue indefinitely, Meta said.

The Meta Group, in Stamford, Conn., is at