UK IT spend to rise next year

Fifty-three percent of UK firms predict that their IT spending will rise next year, according to the latest research from the National Computing Centre
Written by Dan Ilett, Contributor

The National Centre for Computing found in its 2004 survey on IT spending that 53 percent of respondents expected their IT spending to rise next year, and that more people were seeing Unix and Linux computers as a valid alternative to Windows.

According to the survey, 39 percent of respondents said their IT spending would fall, while the remainder predicted no change. The forecasts, NCC said, were fractionally gloomier than year's survey.

Michael Dean, director of membership for the NCC, said in a statement: "Interestingly, the number of Linux and Unix workstations is actually smaller than in the previous year's survey. But as always, with Linux, high levels of growth are predicted. It's looking like Linux is now being seriously considered as a viable alternative to proprietary solutions, but other issues are precluding Linux from the final selection."

The firm added that upgrading to Windows XP was dominating respondents' spending forecasts. Head of publishing for NCC Ian Jones said in a statement: "In two years' time, respondents expect to have replaced almost all of their Windows 9X and NT systems. Windows 2000 systems will represent only 20 percent of installed desktops, and over 60 percent of desktop systems will be running Windows XP."

Other results were varied -- IT staff in the vendor sector predicted the highest spending (10 percent), business services (6 percent) and health and education (3 percent). Those who worked in central government, manufacturing and the finance sector said their IT purchases would fall up to 7 percent.

The average growth rate predicted growth was 1.9 percent, which is higher than the 2003 result of 1.4 percent. The finance sector spent an average of £6,101 on each user, a number well above the cross-sector average of £2,904, but dwarfed by its figure from last year of £9,853.

The NCC said that the traditional cycle of IT development was largely driving spending patterns. It added that the sectors that predicted falls in spending were the ones that reported higher levels of capital development spending this year.

Firms reported that 68 percent of total IT spending went on operational costs, which included staff, and 28 percent was down to development spending. The last 4 percent was attributed to the end-users.

The Web-based survey was based on 168 respondents' views.

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