Cape Town A, 02 Aug 2004
IT budget growth is back on the agenda for most companies, but is limited, as the exuberance of the past is not re-emerging as many organisations renew aging infrastructure, say Gartner analysts.
Gartner head of research Peter Sondergaard said in opening this year`s Symposium/ITxpo Africa in Cape Town today, that the cautious increase in spending was taking the IT industry out of the "doom and gloom" period it had slumped into during the past four years.
"IT spending is back on the agenda. However, the outlook is cautious as it will mean a change in relationships," he said.
According to the first slide of the session, IT Budget Change for the Previous Year, this year is forecast to see a 1.4% rise in IT budget spending after falling to zero percent last year after reaching a peak of 15.9% in 1999.
Sondergaard said the importance of hardware has started a long-term decline, and that software and services will be of increasing importance and this will change the supplier-customer negotiating balance.
"Hardware vendors will be at a disadvantage, while those companies offering software and services will be strengthened in their negotiations with their customers," he said.
It will also change the "battlefield" of the companies competing with each other to get a larger slice of the new IT spending pie.
Sondergaard said services companies will try and "eat" into more and more of their clients` internal services functions, and software companies will try and get more of the services spending.
"The real war will be fought between software and services companies," he said.
The annual Gartner Symposium/ITxpo Africa will run for three days and end on Wednesday, 4 August.
Apart from the Gartner analysts, speakers from various companies such as Symantec, Computer Associates, Internet Solutions, Novell and Oracle South Africa will make presentations.
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