Interesting PR-
Tech Spending Sees Modest Uptick After Years Of Stagnation
08/23/2005
Dow Jones News Services
(Copyright © 2005 Dow Jones & Company, Inc.)
By Donna Fuscaldo
Of DOW JONES NEWSWIRES
Skyrocketing oil prices may make consumers think twice before plunking down hundreds of dollars on a new computer. But for corporations, spending on technology gear appears to be picking up steam.
Nobody is predicting dramatic increases, but analysts say technology outlays will rise anywhere from 5% to 7% this year.
"What we're seeing so far is a U.S. economy that is shrugging higher oil prices, higher interest rates and is chugging along quite nicely," said Andrew Bartels, an analyst at Forrester Research, a Cambridge, Mass.-based technology research firm. "It's reflected in companies' profits and willingness to spend on technology."
Forrester predicts technology spending will rise 7% this year in the U.S. That's up from 3% growth in 2004. Still, from a historical standpoint, Bartels said spending increases are "very modest."
For most of the year the technology sector has benefited from higher sales of everything from computer hardware to software to networking gear as companies move to upgrade their aging infrastructures. Even when Dell Inc. (DELL) missed its second-quarter revenue target, it was due to aggressive pricing rather than sluggish demand.
The uptick is also being aided by the slew of new regulatory rules and a need for greater protection from hackers and other nefarious cyber criminals.
"Security is a no-brainer," said Laura DiDio, an analyst at The Yankee Group, of companies spending intentions. " There's a lot more danger out there."
Boston-based Yankee Group recently surveyed 1000 businesses worldwide to get a sense of their technology spending plans for the year. The research firm found that 45% plan to spend more on tech gear. Of that group, 21% said spending will increase less than 5% while 4% plan to increase outlays by 30% to 50%. The spending, said DiDio, is all over the map, which bodes well for various technology vendors including Dell, Hewlett-Packard Co. (HPQ), International Business Machines Corp. (IBM), EMC Corp. (EMC) and Microsoft Corp. (MSFT).
<snip>
-R
