Stamford, Conn. (March 4, 2004) -- Information technology buyers expect their budgets for 2004 to grow across the board, with the software segment leading the way, according to a report by Stamford, Conn.-based Gartner Inc., a provider of research and analysis on the global information technology industry.

IT spending returned to budgeted levels in January -- evidence that U.S. companies are optimistic, according to Gartner. The research firm's Technology Demand Index (TDI) for January recorded a score of 100 for current spending -- meaning that businesses spent exactly what they had budgeted for the month. IT spending among U.S. enterprises had been under budget since the launch of the TDI in March of 2003. The index is based on interviews of more than 600 IT decision makers in small, midsize and large public and private companies.

According to the report, corporate IT buyers have shifted from "stall mode to controlled spending." Across all technology sectors, Gartner said actual IT spending was on par with budgets -- a stark contrast to under-budget spending reported in the fourth quarter of 2003.

"Stable current spending reported in January means that projected increases in 2004 budgets are beginning to flow through organizations," said David Hankin, senior vice president and general manager at Gartner. "This bodes well for the spending increases foreseen by many IT decision makers and suggests that companies are moving forward with their IT strategies. These spending increases are not attributed to a 'January effect,' because half of the respondents are managers in enterprises with fiscal years that do not coincide with the calendar year."

Two segments of external IT services spending were higher than expected: IT management (TDI of 110) and process management (TDI of 113). The current TDI was also unexpectedly high for tablet PCs (TDI of 122), desktop PCs (TDI of 117) and notebooks (TDI of 110), Gartner reported.

Gartner expects the demand for application development/integration and security applications to grow significantly faster than for all other software categories, driven by the development of Web-based applications for internal communication/reporting and integration of existing applications.

-- WebCPA staff

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