Merrill Lynch CIO survey sees IT spending stable in Q2

25.04.2005
Von Todd R.

IT spending is expected to remain stable in the second quarter in comparison with the first quarter, according to a new Merrill Lynch & Co. Inc. snapshot survey of 100 global CIOs.

The survey of CIOs -- 75 in the U.S. and 25 in Europe -- was conducted by Steven Milunovich, a financial analyst at New York-based Merrill Lynch. It found that 11 percent of the CIOs expect their IT spending to be higher than in the first quarter. That compares with 6 percent who expected their first-quarter IT spending to be higher than spending in the fourth quarter of last year.

Still, 77 percent of the CIOs said they expect second-quarter IT spending to remain unchanged, up slightly from the 72 percent who expected first-quarter IT spending to be unchanged.

CIOs who took part in the TechStrat Survey said they expect to see spending rise in the current quarter because budget cuts, project delays and lower prices affected IT spending in the previous quarter, according to the report.

The rise in the number of CIOs expecting an IT spending increase is modest, but noteworthy, Milunovich said in an interview Monday. "I"m encouraged that they claimed that second-quarter spending would be more normal," he said.

The CIOs were also asked about a wide range of IT issues, including planned software purchases, new technologies they expect to invest in and their impressions of Microsoft Corp."s future Windows release, dubbed Longhorn.

The CIOs said they expect to buy more security, database and storage management software this year, while they"ll purchase less enterprise resource management packages and desktop applications, according to the survey.

Asked to rank new technologies in which they are interested, the CIOs cited wireless technologies, followed by voice-over-IP products, radio frequency identification tags, virtualization technology, grid computing and biometrics, the survey said.

As for the upcoming operating system from Microsoft, due out late next year, the CIOs said they look forward to new security enhancements, integration and workflow features, search capabilities, storage management features, and graphics and performance improvements. Some 48 percent of the respondents said they expect Longhorn to create a PC upgrade cycle, the survey reported.