Many Increase IT Budgets, Despite Cutbacks

Despite layoffs and cutbacks among numerous information technology vendors, many organizations are increasing their IT budgets in 2001, according to a new survey by Stamford, Conn., IT research firm Gartner Inc.

The survey showed that 56 percent of respondents plan to spend more on IT in 2001 than they did in 2000. It also found the government leading the way, with an increase of 18 percent between 2000 and 2002, followed by telecommunications services, which is expected to increase IT budgets as a percentage of revenue by 13.9 percent.

Gartner surveyed 589 organizations worldwide between March and June. The average enterprise had $2.3 billion in revenue and 8,100 employees, including 286 IT workers.

Gartner found the economic climate has not deterred leading-edge adopter industries from increasing their budgets as a percentage of revenue.

"While many IT vendors are having a difficult time right now, it's important to point out that this does not necessarily translate into trouble for the organization's IT spending budget," said Barbara Gomolski, research director for Gartner. "Though companies have cut back on their hardware purchases, they continue to spend on services and personnel."

Not all sectors are increasing IT spending, however. The utilities industry is expected to reduce IT budgets as a percentage of revenue by 15 percent between 2000 and 2002. The construction industry is also expected to decrease IT budgets as a percentage of revenue by 13.5 percent.