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This year's National Computing Centre survey on UK IT spending shows slightly more pessimism than last year. Some 53 per cent of respondents expect IT spending to rise, 39 per cent expect a fall and the rest expect no change. But the median growth rate in IT spending across all sectors was 1.9 per cent, up from last year's figure of 1.4 per cent.

Expected growth in budgets varied considerably by market sector. Health organisations forecast growth of three per cent while business services companies expect growth of six per cent. Most optimistic were IT suppliers who expect a ten per cent increase in budgets. Manufacturing and finance firms predict a fall of one per cent in spending and central government respondents expect a fall of seven per cent.

The median spend per end-user across all sectors was £2904. Spending is cyclical, with operational spending staying relatively stable while capital and development spending tends to fall the year after a big spending spree. Across the board, organisations spend 68 per cent of budgets on operational costs, including staff, and 28 per cent on capital and development costs.

For desktop systems, respondents said upgrades to Windows XP are the big change for the next two years. Only 23 per cent of desktops are running XP, compared with 35 per cent running an older version of Windows or Windows NT, 35 per cent are running Windows 2000.

Thin client machines are in use in 16 per cent of organisations but represent just five per cent of installed desktops - this is expected to grow to 11 per cent in the next two years. The number of Linux workstations is smaller than in last year's survey but high levels of growth are again predicted.

The NCC annual survey was based on 168 responses to a web-based survey carried out in July and August 2004.

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