IT spend: Security getting the big bucks, CRM loses out

CIOs remain cautious...

Integrating applications and buying security software are in, and CRM software and new hardware purchases are out, according to a survey of chief information officers in the US. Morgan Stanley's August survey of 225 CIOs indicates that information technology spending isn't likely to change soon from levels set in the first half of 2002. Forty-nine per cent of the respondents said their IT spending plans would be flat in the second half, with 28 per cent predicting they would spend less. A mere 16 per cent planned to boost spending. Analysts said worries about the economy and the stock market have created a cautious spending environment. "The results suggest the traditional fourth-quarter budget flush, if it materialises at all, will be modest," the Morgan Stanley report said. But not all IT spending is created equal, according to the survey. The top priorities for CIOs are applications integration, security software and enterprise resource planning (ERP) software upgrades. ERP moved up as a priority in August from the number nine spot in July. Eighty per cent of respondents said they had launched new development projects this year, but CIOs remain wary of software for customer-relationship management. Among the CIOs surveyed, 20 per cent thought CRM was "useful, but not a high priority at the moment" another 20 per cent noted they were unsure about the potential return on investment. Twenty-nine per cent said they either didn't need CRM or were sceptical about it. Linux, meanwhile, continues to creep into IT budgets. Among the respondents, 29 per cent said they owned Linux servers, and eight per cent are formally considering buying them. On an informal basis, 17 per cent of the CIOs said they were considering Linux servers. The remainder (46 per cent) noted they didn't own and weren't considering Linux. For those that have recently purchased new Linux servers, 31 per cent were adding capacity, 31 per cent were replacing Windows systems, 24 per cent were replacing Unix and 14 per cent were replacing other operating systems. Among the other findings: * The outlook was mixed for hardware purchases, as 44 per cent of CIOs said their servers were running at 41 per cent to 60 per cent of capacity. Twenty-seven per cent said their servers were running at 61 per cent to 80 per cent. Asked when they'd have to buy more server hardware, 28 per cent of CIOs predicted in the second half of 2003, followed by 18 per cent eyeing the first half of 2003. A big block (28 per cent) was unsure. For PC upgrades, 41 per cent said they would replace PCs "as needed," indicating that the costs were low to maintain older computers. * Though application integration, security and ERP software were the top priorities, Windows 2000/XP desktop upgrades, ecommerce initiatives and Microsoft Office upgrades rated high. * Among the CIOs, the leader for help desk and sales automation software was Siebel, with PeopleSoft, Oracle and SAP close behind. * Fifty-one per cent of CIOs said they would spend about the same on network equipment in the second half of the year, compared with the first half, with 26 per cent spending less. * Wireless local area networks were also slow to get rolling, with 40 per cent of CIOs indicating they had no intention of setting wireless LANs. Twenty per cent are considering the installation of wireless LANs, four per cent are currently implementing them, and 34 per cent have used them selectively. Larry Dignan writes for News.com