2005 looks good for IT spending

Forrester's 2005 IT spending survey is out, and the signs are good for corporate IT spending. Specifically, Forrester finds that application software will be the big winner, with 59% of decision-makers surveyed identifying deployment or upgrade of major packaged applications as a priority, replacing security as the top priority from the past year. Some key priorities for decision makers surveyed include:

• Regulatory compliance. 38% percent consider support for governance, such as Sarbanes-Oxley, a critical priority, while 65 percent said it was a priority.


• Business intelligence and financial apps. Demand for BI applications is projected to increase 9%. Regulatory concerns and an increasing quantity of data caused BI to retain the top spot in planned purchases. Demand for financial applications also stayed on top in 2005 with 4% growth.


• Content management could be the next "killer app." Purchase plans for content management increased 15 percentage points from last year, as firms adopt enterprise-wide strategies for managing Web content, documents, records, and digital assets.


• IT consulting. 69% of companies that identified application upgrade as a priority will purchase consulting help for those projects. Overall, the demand for systems integration services increased 10 percentage points this year, from 34% planning to purchase in 2004 to 44% for 2005.


• IT outsourcing. Application outsourcing is fueling Forrester's forecasted growth of 9% for the category, with outsourcing for applications maintenance growing 27% in 2005.

It's not a return to the go-go years of the late 1990s, but it's a positive trend for software and services providers nevertheless.

Additional details are in Forrester's press release.

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