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Irish IT spending to rise in 2006

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IT expenditure in Ireland is set to increase across the board in 2006, a new survey from IDC has shown.

According to the study, organisations across a range of industries are set to follow the public sector's example by increasing their IT spending. The public sector was one of the main drivers of the Irish IT market in 2005, while the private sector concentrated on keeping costs low.

Public sector spending is expected to remain strong throughout the year, according to the research firm.

Some 48 per cent of all organisations expect to increase their expenditure on IT products and services this year, while only 15 per cent expect it to be lower, compared with 29 per cent the previous year.

Large and medium sized organisations are the most optimistic about increasing their IT spend, with some 62 per cent and 57 per cent respectively anticipating a boost. Meanwhile, 38 per cent of small firms and 37 per cent of the very small organisations are intending to spend more on their IT.

This intention to boost IT spending is despite the fact that only 64 per cent of end-user organisations are expecting sales or revenues to be higher this year than last, compared with the 70 per cent seen the year before. This is more pronounced in organisations with fewer than 100 employees, where only half of these expect to be able to improve the previous year's sales/revenue.

"IT expenditure expectations are more positive than they have been for some years," IDC consultant and author of the report John Gilsenan said.

"While government organisations drove demand in 2005, this year the positive sentiment is being expressed by private sector organisations too. However, the positive mood is largely restricted to medium and large organisations while smaller businesses continue to feel the heat of competition and rising costs. There is little evidence that significant numbers of small businesses are looking to IT investments to gain competitive advantage."

Businesses are continuing to face IT challenges such as upgrades and new implementations - good news for IT suppliers, as they will be kept busy supplying the systems. Meanwhile, security and mobility solutions are the areas that many organisations intend to invest in.

Copyright © 2006, ENN

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