Survey shows UK at forefront of 2003 IT recovery

A major survey of large European companies has named the UK, Ireland and Italy as IT growth 'bright spots' for 2003.

The survey, conducted by the UK division of the global IT research company, Gartner, predicted a rise in corporate IT spending in the second half of 2003.

It added that although IT spending levels remain uneven across European countries, the UK, Ireland and Italy are considered to be the 'bright spots' where spending growth is expected to be most significant next year.

The survey, conducted amongst large European company Directors, showed Germany was expected to experience a continued decrease in IT spending whilst other countries would enjoy a rise.

Following a year of contraction in 2001 and only a 1.7 per cent rise in 2002 in Western Europe, Gartner says it is confident IT spending will more than triple to 5.4 percent in 2003.

It said the key areas for growth would be in software and IT services, whilst spending on hardware was likely to remain 'dead-flat.'

Despite the good news for the UK, Ireland and Italy, the survey showed the majority of European IT Directors anticipated only 'a flat' or 'slight' increase in their IT budgets for next year.

In another recent survey, 78.4 percent of large European company Directors said they expected IT budgets to stay the same or increase next year, compared with 21.4 per cent who said they expected budgets to decrease.

Peter Sondergaard, Head of European Research at Gartner, said: "The most important issue in 2003 is to change how budgets are spent. The reality is that businesses will still be operating with budgets at the same level as in 2000. While business priorities are still on cutting costs, IT departments must find a way to divert focus from pure cost-cutting to continued cost-optimisation, and to make investments that deliver business value from IT."

The survey showed company Directors' key priority was to reduce their total cost of IT.

Industry commentators have said this is likely to further fuel businesses' use of foreign IT outsourcing services.

Gartner stopped short of broaching offshore outsourcing directly, instead advising businesses the most immediate method of demonstrating value for technology was by investing in the 'consolidation' of existing IT infrastructure.