3 October 2002 -- Data gathered from the Yankee Group's 2002 Global Network Strategies Survey of European Large Companies shows that uncertainty due to geopolitical worries, stock market meltdown, and poor macroeconomic performance is on the rise for next year.
The figures illustrate that vendors will face tremendous competitive pressures in an already depressed IT market. Large companies will still continue with e-business initiatives but will remain cautious, topping their to-do lists with managed security and e-commerce platforms.
Senior analyst, Landry Fevre said, "More than half of IT and communications budgets will increase 53% this year, and 46% in 2003; and the average rise in IT spending will be 18% in 2002, and 16% in 2003."
"Almost a third of companies interviewed intend to reduce their budgets, and this will remain the same next year with a sharper slump from 10% - almost doubling - to 19% of IT budget reduction."
Ongoing massive reorganisations, workforce reduction, budget reshuffling and disposal of assets are the symptoms of this gloomy outlook. While this may add to the uncertainty faced by service providers and software and hardware vendors, the data points to opportunities in areas that are not speculative but mission-critical are primarily managed services, security, and storage. The enterprise IT spending pattern has shifted from strategic to one that is more pragmatic, operational, and execution oriented.
Consolidation and integration projects are on top of action plans, so enterprises need tools and solutions that help them better use their current infrastructure. The Report, Corporate Europe: Take Stock and Remain Cautious, reviews European corporations IT spending, security, and staffing issues.