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Business
IT Spending Expected to Fall for First Time in Over a Decade
SCOTTSDALE, Ariz., October 17, 2001
- Due to uncertain economic conditions in the U.S., overall business
IT spending is expected to experience a significant fall of more
than 12% from 2000 estimates, according to Cahners In-Stat (http://www.instat.com).
The research firm reports that this marks the first decline in total
business IT spending in the last decade. Additionally, the impact
of the September 11th events is expected to drive spending further
downward, particularly among smaller companies (< 100 full-time
employees), where business failures are believed to be on the rise.
This, combined with smaller IT budgets overall in 2001, should lead
to falling IT spending among U.S. businesses this year and a slow
recovery in the future.
"This is literally a 'new' economy,"
says Kneko
Burney, Director of In-Stat's
eBusiness Infrastructure & Services research. "The unfortunate reality
is that many businesses over-invested in IT products and services
in 2000, creating conditions for sluggish demand in 2001. This alone
was expected to lead to a decline in IT spending prior to September
11th. However, one month after these events, we believe the fear
and economic uncertainty following will lead to a freeze in IT investments
for the next few months and will continue to negatively impact our
economy and IT spending well into 2002."
In-Stat also found that:
- Areas of IT spending expected to
be least affected are communication services and networking and
outside services like applications integration and hosting.
- Per firm IT spending (products,
services and personnel) estimates are:
- Enterprise (1000 full-time
employees): $19 million in 2001, falling 18%
- Middle Market (100 to 999 FT
employees): $846K in 2001, falling 13%
- Small business (5 to 99 FT
employees): $70K in 2001, falling 17%
- SOHO business (<5 FT employees):
$6K in 2001, down 27%
The reports, "Entering the Access
Era: IT Spending & the Factors Influencing IT Purchases"
provide five-year forecasts of IT spending among the four U.S. business
segments including, communications, networking, systems, applications,
personnel and outside services. The reports also provide demographics
and channel information. The forecasts provided in these reports
do not include the impact of the September 11th events. Customers
can gain access to the most recent forecasts through inquiry. To
purchase any of these reports, or for more information, please contact
Chris Kissel at 480.609.4531;
ckissel@instat.com. Each
report is priced at $3,995.
Cahners In-Stat Group (http://www.instat.com)
covers the full spectrum of digital communications research from
vendor to end-user, providing the analysis and perspective that
allows technology vendors and service providers worldwide to make
more informed business decisions.
In-Stat is a unit of Cahners Business
Information (http://www.cahners.com),
a leading provider of critical information and marketing solutions
to business professionals and a member of the Reed Elsevier plc
group.
For more information,
contact:
Kneko
Burney, Director - eBusiness Infrastructure & Services
Phone: 480.609.4544
Email: kburney@instat.com
Kirsten Skedd,
Marketing Manager
Phone: 480.609.4534
Email: kskedd@instat.com
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