Corporate IT spending to slow down through 1999

Y2K fixes take cash from other IT projects

Corporate IT spending is expected to slow next year, according to a survey by Morgan Stanley Dean Witter. Although hardware purchases will increase by between four and six per cent, this is less than the seven to nine per cent growth rates the industry has witnessed during recent years. However, of the Fortune 500 companies polled, 75 per cent said they haven't changed their technology budgets because of economic conditions or market turmoil. In particular, the uncertainties in the Far East, Russia and South America seem to be having little affect on IT spending plans, the survey said. But the report underlined the widely held notion that spending to rectify the Year 2000 computer bug has diverted cash away from other IT projects. Around three quarters of those companies which said that spending on computers would slow next year blamed it on trying to solve the millennium bug. The report also highlighted some interesting purchasing trends. For example, IBM, Compaq and Hewlett-Packard have been singled out by respondents to receive the bulk of next year's IT hardware spend. And Microsoft, IBM and Oracle topped the list for projected spending for software vendors. Cisco should maintain its hold on networking expenditure, the survey maintains, with Bay Networks and IBM following behind. ®

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