Study presents sanguine view of IT budgets

A report by independent market analyst, Datamonitor reveals that IT budgets have grown in 2006, and that the outlook for 2007 is also optimistic. According to the report, whilst increases are not proving even across the board -- with variations by geography and type of expenditure -- relatively stable economic conditions are having a positive effect on enterprises' IT investments in the U.S. and Western Europe.

Through interviews with 200 IT decision-makers in enterprises in Western Europe and the U.S., Datamonitor's report, the first of a series to come from Datamonitor's Technology Trends service, provides insight into the evolution of enterprise IT budgets in Western Europe and North America. The report highlights areas of positive and negative growth in IT spending, and analyses the reasons behind these trends.

The overall trend from the survey is that IT budgets have increased in 2006, with enterprises' forecasts suggesting slight increases to IT budgets in 2007. 43 percent of the surveyed enterprises state that they see their IT budget increasing in 2007, compared to the 32 percent whose budget increased from 2005 to 2006. Encouragingly for vendors, the percentage of enterprises that see their IT budget decrease is likely to reduce, from 21 percent in 2006 to 17 percent in 2007. The net effect of current and forecast budget changes is therefore positive.

In comparison to enterprises in European markets, a higher percentage of U.S. enterprises have seen their IT budget increase in 2006 (64 percent in total). U.S. enterprises are also the most optimistic when it comes to anticipated IT budget changes in 2007, with 72 percent expecting to increase their IT spending next year. Stable economic figures (GDP growth was 3,3 percent in 2005) coupled with an open-minded approach towards new technologies, is translating well into increased IT spending.