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No news is bad news for IT vendorsFrom the National Computing Centre (NCC), Manchester, UK The latest national survey of corporate IT spending by the National Computing Centre shows a stable environment with incremental growth in many sectors and no major surprises. This is not great news for IT vendors as this year's results continue a trend of modest growth since the early years of the millennium. The finance sector is bucking the trend however with a spend level that outstrips other sectors, whilst the most in demand technology is Voice over Internet Protocol, (VoIP). Respondents to the NCC Benchmark of IT Spending 2006 revealed details of current and predicted expenditure up to 2008. Headlines include:
The median level of corporate IT spend across all sectors and sizes of organisation for 2005-6 has increased by 28% to £3891 per end user. This result shows a significant increase over last year but in part can be accounted for by increased representation of the finance sector in the results. Spending levels vary across organisations depending where they are in their investment cycle. Half of the respondents reported a total IT spend between the lower quartile of £2148 per end user and the upper quartile of £6286 per end user. The finance sector reported the highest level of spend with, typically £9864 being spent per end user. Other high spending sectors included other services, transport and utilities, and business services. The lowest spending sectors included local government and health at £2189 and £1713 spent per end user respectively. Both of these sectors have benefited from heavy investment in preceding years and appear to be exploiting this investment. Overall the median corporate IT spend as a percentage of turnover was 2.5%, the same as last year, indicating a continued period of steady but modest investment. “Today's results tell us that IT decision-makers are confident, but not over enthusiastic about future prospects. The environment is stable with modest growth in most sectors and organisations are typically making incremental rather than wholesale changes to their IT provision. IT vendors will face a tougher environment and will clearly need to demonstrate added value to win over customers” said Stefan Foster, Managing Director of NCC Ltd. He continued, “With on-line security a significant issue for the finance sector, it is no surprise to see they are spending more than the average.” Predictions also remain stable Staffing rates continue to rise with the median level of staffing up to 28.1 per 1000 end users, up 15% on last year. The finance sector is a key contributor to this result as organisations in this sector typically employ 75 IT staff per 1000 end users. Excellent prospects for Vista on the desktop Portables to account for almost one third of IT spend Convergence technologies top the development list Respondents report increasing interest in Network Attached Storage, virtualisation technologies (such as VM Ware and Virtual Server) and techniques for clustering, whilst the mainframe continues its slow decline. Browser based technologies are growing quickly, as is LINUX adoption, but not on the desktop. This year's Benchmark was based on the responses from 205 organisations who were canvassed in August 2006. Notes to EditorsThe Benchmark of IT Spending 2006 is available from the National Computing Centre (free to NCC Principia Members in electronic format, £125 to non-members, available at the NCC shop. The Benchmark covers:
About The National Computing Centre (NCC)The National Computing Centre (NCC) is the single largest and most diverse corporate membership body in the UK IT sector. NCC champions the effective deployment of IT to maximise the competitiveness of its members' business, and serves the corporate, vendor and government communities. Principia is a membership programme for IS and IT decision makers. Principia helps IT directors and managers, functional specialists and individuals to grow their skills, knowledge, contacts and careers in IT by providing independent advice, guidance and best practice. By focusing on best practice in IT delivery, Principia helps its members to make informed decisions and deliver the most effective business solutions. Services available to members includes regular publications, including surveys and reports, a full event and conference programme, a comprehensive web resource, helpline and accredited training. A range of membership packages is available for organisations of all sizes. Principia is delivered by NCC Ltd, a division of the National Computing Centre. Press copies of the Benchmark of IT Spending 2006 can be obtained from: Press Contact Michael Dean Tel: +44 (0)161 242 2121 |