Survey Shows Drop In IT Spending Growth At U.S. Firms

Information-technology spending among top U.S. firms may slow in 2001, shows a survey from Morgan Stanley Dean Witter & Co. After a 12% average increase in the year 2000, technology budgets will grow a more modest 8% in 2001. And 16% of respondents plan to spend less in 2001 than this year, says the annual year-end survey of chief information officers from 150 major companies. The more-subdued spending isn't surprising given the uncertainty in the economy, financial markets, corporate earnings, and the political environment, says Charles Phillips Jr., managing director in Morgan Stanley Dean Witter's Technology Group. Also, spending was front-end loaded in 2000, reflecting post-Y2K activity and the dot.com frenzy. Other findings:

  • Fourteen percent of respondents will monitor the economy and spend more gradually in first-half 2001, saving the bulk of their budgets for the second half.
  • Top three categories for increased spending: database software, marketplace software, and e-commerce software.
  • Forty percent of IT budgets are earmarked for outsourcing. Financial services firm Morgan Stanley Dean Witter is headquartered in New York.
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