IT spend rises fastest in mid-size firms

Mid-sized firms buck IT budget trends

IT Week staff, IT Week 28 Apr 2008

More mid-sized firms are increasing their 2008 IT budgets than large enterprises, and those increases are also larger than ones being made at larger firms, a new IDC report concluded.

Investment in security and modernising infrastructure and applications is driving that investment, IDC reported.

But Mette Ahorlu, consulting director of IDC's European software and services group also noted that spending priorities vary greatly depending on vertical industry. "They
don't see size as a major determinant of their IT needs. The specific character of each vertical industry plays a much stronger role than organizational size," he said in a statement.

Nevertheless, one likely characteristic of these firms was a tendency to buy more standardised services than larger firms, Ahorlu added.

IDC based its report on interviews with IT leaders at 200 enterprises with 500-1,000 employees.

In a separate report, IDC also noted that European spending on IT services grew steadily during 2007 but predicted that growth would slow in the coming years.

IDC said European firms spent $192.3bn on IT services in 2007 – a 6.4 per cent increase on the previous year, based on a constant currency conversion.

In 2008, IDC predicts that spending will rise by 4.8 per cent, that slowdown driven by uncertainty in the economy. Furthermore, the slowdown in the UK, France and Germany is expected to be sharper than other European countries.

Spending in project services is the likeliest area to be cut, IDC reported, with spending on support services less affected, and with "little or no impact" in outsourcing spending.

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