"What is interesting is that when you look at it by company size, for the first time in four years, firms that have 5,000 or more employees are claiming their budget is going to increase more so than companies that have 100 or fewer employees," said Gary Beach, group publisher at CXO Media Inc. in Framingham, Mass. "Usually, it's the smaller companies whose budget is going to increase."

Quarter-over-quarter spending projections increased for computer hardware, telecommunications equipment, outsourced IT services, infrastructure software and security software, according to the survey.

While overall spending predictions dropped, 54.9 percent of respondents cited "enabling business processes" as their top spending priority for fiscal 2007, followed by 25 percent reporting that their priority will be "improving IT performance," according to the poll.

"The age of 'do more with less' is dead," said Beach. "This bodes well for the services sector, as CIOs and IT professionals will be leaning more on services companies. And it also bodes well for business application sectors, business intelligence and CRM."

When asked about spending across eight specific IT categories, the average percentage of panelists who said they planned to increase spending over the next 12 months was 43.1 percent in the April-June quarter, down from 44.8 percent who said that in the previous quarter. The percentage of panelists who plan to cut spending also decreased slightly, from 13.8 percent in the first quarter of the year to 12.7 percent in the second quarter.