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IT Watch: December 2004
20 December 2004
 
Brian Smith   Paul A. Schwarz  

IT budgets will increase in 71 percent of organizations in 2005. Total enterprise IT budgets will grow 9 percent. Communications, financial services and government budgets will exceed the average; retail/wholesale and manufacturing firms will lag.








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Table of Contents


    
 Analysis

1.0
    
 IT Watch: What Is New

1.1
    
 Sector-Specific Highlights of Reported Changes in 2005 Budgets
2.0
    
 Top-Level Indices: Current Demand and Projected Demand

2.1
    
 Current Demand by Sector
2.2
    
 Current Demand by Product Category
2.3
    
 Projected (2005) Demand
3.0
    
 Budget Allocations by Product/Service Category
4.0
    
 Current Purchasing and Projected Purchasing Plans for Products and Services
5.0
    
 Vendor Purchasing Incidence Statistics

5.1
    
 Hardware Vendor Purchasing Incidence
5.2
    
 Software Vendor Purchasing Incidence
5.3
    
 Networking and Telecommunications Vendor Purchasing Incidence
5.4
    
 IT Services Vendor Purchasing Incidence
6.0
    
 What to Watch
Appendix A.
    
 Acronym Key
Appendix B.
    
 IT Services Indices — Monthly
Appendix C.
    
 Vendor Summary Indices — Monthly
Appendix D.
    
 Overall Sector and Product Indices — 13-Week Moving Averages
Appendix E.
    
 Vendor Indices for Products — Monthly
Appendix F.
    
 IT Watch Sample Breakdown — January Through November 2004


List of Figures


Figure 1. 
 Direction of IT Budgets in 2005 — Overall
 

Figure 2. 
 Direction of IT Budgets in 2005 by Sector
 

Figure 3. 
 Direction of IT Budgets in 2005 for Hardware
 

Figure 4. 
 Direction of IT Budgets in 2005 for Software
 

Figure 5. 
 Direction of IT Budgets in 2005 for Networking and Telecommunications
 

Figure 6. 
 Direction of IT Budgets in 2005 for IT Services
 

Figure 7. 
 Changes in IT Budgets for Hardware as Reported by IT Watch Respondents
 

Figure 8. 
 Changes in IT Budgets for Software as Reported by IT Watch Respondents
 

Figure 9. 
 Changes in IT Budgets for Networking and Telecommunications as Reported by IT Watch Respondents
 

Figure 10. 
 Changes in IT Budgets for IT Services as Reported by IT Watch Respondents
 

Figure 11. 
 Current and Projected Demand — Aggregate
 

Figure 12. 
 2004 IT Spending vs. Budgets by Company Size
 

Figure 13. 
 Anticipated Changes to IT Spending in 2005 Compared to 2004 (Weighted by Vertical to Reflect Qualified Universe of All Networked Organizations)
 

Figure 14. 
 Current Demand by Sector — 13-Week Moving Averages
 

Figure 15. 
 Current Demand for Hardware Product Categories — 13-Week Moving Averages
 

Figure 16. 
 Current Demand for Software Product Categories — 13-Week Moving Averages
 

Figure 17. 
 Current Demand for Networking and Telecommunications Product and Service Categories — 13-Week Moving Averages
 

Figure 18. 
 Current Demand for Externally Sourced IT Services Categories — 13-Week Moving Averages
 

Figure 19. 
 Primary and Secondary Reasons for Spending Less on Hardware in 2004 Than in 2003
 

Figure 20. 
 Primary and Secondary Reasons for Spending Less on Software in 2004 Than in 2003
 

Figure 21. 
 Projected (2005) Demand by Sector — 13-Week Moving Averages
 

Figure 22. 
 Projected Demand for Hardware Product Categories — 13-Week Moving Averages
 

Figure 23. 
 Projected Demand for Software Product Categories — 13-Week Moving Averages
 

Figure 24. 
 Projected Demand for Networking and Telecommunications Product and Service Categories — 13-Week Moving Averages
 

Figure 25. 
 Projected Demand for Externally Sourced IT Services Categories — 13-Week Moving Averages
 

Figure 26. 
 Mean Allocation of Hardware Budgets by Vertical
 

Figure 27. 
 Mean Allocation of Hardware Budgets by Company Size
 

Figure 28. 
 Mean Allocation of Software Budgets by Vertical
 

Figure 29. 
 Mean Allocation of Software Budgets by Company Size
 

Figure 30. 
 Mean Allocation of Networking and Telecommunications Budgets by Vertical
 

Figure 31. 
 Mean Allocation of Networking and Telecommunications Budgets by Company Size
 

Figure 32. 
 Mean Allocation of IT Services Budgets by Vertical
 

Figure 33. 
 Mean Allocation of IT Services Budgets by Company Size
 

Figure 34. 
 Hardware — Servers: Percentage of Respondent Organizations Currently Purchasing (2004) and Projecting to Purchase (2005) by Vertical
 

Figure 35. 
 Hardware — Servers: Percentage of Respondent Organizations Currently Purchasing (2004) and Projecting to Purchase (2005) by Company Size
 

Figure 36. 
 Hardware — Desktops: Percentage of Respondent Organizations Currently Purchasing (2004) and Projecting to Purchase (2005) by Vertical
 

Figure 37. 
 Hardware — Desktops: Percentage of Respondent Organizations Currently Purchasing (2004) and Projecting to Purchase (2005) by Company Size
 

Figure 38. 
 Hardware — Notebooks: Percentage of Respondent Organizations Currently Purchasing (2004) and Projecting to Purchase (2005) by Vertical
 

Figure 39. 
 Hardware — Notebooks: Percentage of Respondent Organizations Currently Purchasing (2004) and Projecting to Purchase (2005) by Company Size
 

Figure 40. 
 Hardware — Handhelds: Percentage of Respondent Organizations Currently Purchasing (2004) and Projecting to Purchase (2005) by Vertical
 

Figure 41. 
 Hardware — Handhelds: Percentage of Respondent Organizations Currently Purchasing (2004) and Projecting to Purchase (2005) by Company Size
 

Figure 42. 
 Hardware — Storage: Percentage of Respondent Organizations Currently Purchasing (2004) and Projecting to Purchase (2005) by Vertical
 

Figure 43. 
 Hardware — Storage: Percentage of Respondent Organizations Currently Purchasing (2004) and Projecting to Purchase (2005) by Company Size
 

Figure 44. 
 Hardware — Input/Output Devices: Percentage of Respondent Organizations Currently Purchasing (2004) and Projecting to Purchase (2005) by Vertical
 

Figure 45. 
 Hardware — Input/Output Devices: Percentage of Respondent Organizations Currently Purchasing (2004) and Projecting to Purchase (2005) by Company Size
 

Figure 46. 
 Hardware — Security: Percentage of Respondent Organizations Currently Purchasing (2004) and Projecting to Purchase (2005) by Vertical
 

Figure 47. 
 Hardware — Security: Percentage of Respondent Organizations Currently Purchasing (2004) and Projecting to Purchase (2005) by Company Size
 

Figure 48. 
 Hardware — Tablet PCs: Percentage of Respondent Organizations Currently Purchasing (2004) and Projecting to Purchase (2005) by Vertical
 

Figure 49. 
 Hardware — Tablet PCs: Percentage of Respondent Organizations Currently Purchasing (2004) and Projecting to Purchase (2005) by Company Size
 

Figure 50. 
 Software — Back-Office: Percentage of Respondent Organizations Currently Purchasing (2004) and Projecting to Purchase (2005) by Vertical
 

Figure 51. 
 Software — Back-Office: Percentage of Respondent Organizations Currently Purchasing (2004) and Projecting to Purchase (2005) by Company Size
 

Figure 52. 
 Software — Collaborative/Personal: Percentage of Respondent Organizations Currently Purchasing (2004) and Projecting to Purchase (2005) by Vertical
 

Figure 53. 
 Software — Collaborative/Personal: Percentage of Respondent Organizations Currently Purchasing (2004) and Projecting to Purchase (2005) by Company Size
 

Figure 54. 
 Software — Front-Office: Percentage of Respondent Organizations Currently Purchasing (2004) and Projecting to Purchase (2005) by Vertical
 

Figure 55. 
 Software — Front-Office: Percentage of Respondent Organizations Currently Purchasing (2004) and Projecting to Purchase (2005) by Company Size
 

Figure 56. 
 Software — Application Development: Percentage of Respondent Organizations Currently Purchasing (2004) and Projecting to Purchase (2005) by Vertical
 

Figure 57. 
 Software — Application Development: Percentage of Respondent Organizations Currently Purchasing (2004) and Projecting to Purchase (2005) by Company Size
 

Figure 58. 
 Software — Information Management: Percentage of Respondent Organizations Currently Purchasing (2004) and Projecting to Purchase (2005) by Vertical
 

Figure 59. 
 Software — Information Management: Percentage of Respondent Organizations Currently Purchasing (2004) and Projecting to Purchase (2005) by Company Size
 

Figure 60. 
 Software — Systems: Percentage of Respondent Organizations Currently Purchasing (2004) and Projecting to Purchase (2005) by Vertical
 

Figure 61. 
 Software — Systems: Percentage of Respondent Organizations Currently Purchasing (2004) and Projecting to Purchase (2005) by Company Size
 

Figure 62. 
 Software — Design/Engineering: Percentage of Respondent Organizations Currently Purchasing (2004) and Projecting to Purchase (2005) by Vertical
 

Figure 63. 
 Software — Design/Engineering: Percentage of Respondent Organizations Currently Purchasing (2004) and Projecting to Purchase (2005) by Company Size
 

Figure 64. 
 Software — Security: Percentage of Respondent Organizations Currently Purchasing (2004) and Projecting to Purchase (2005) by Vertical
 

Figure 65. 
 Software — Security: Percentage of Respondent Organizations Currently Purchasing (2004) and Projecting to Purchase (2005) by Company Size
 

Figure 66. 
 Networking and Telecommunications — Network Equipment/Applications: Percentage of Respondent Organizations Currently Purchasing (2004) and Projecting to Purchase (2005) by Vertical
 

Figure 67. 
 Networking and Telecommunications — Network Equipment/Applications: Percentage of Respondent Organizations Currently Purchasing (2004) and Projecting to Purchase (2005) by Company Size
 

Figure 68. 
 Networking and Telecommunications — Mobile Handsets: Percentage of Respondent Organizations Currently Purchasing (2004) and Projecting to Purchase (2005) by Vertical
 

Figure 69. 
 Networking and Telecommunications — Mobile Handsets: Percentage of Respondent Organizations Currently Purchasing (2004) and Projecting to Purchase (2005) by Company Size
 

Figure 70. 
 Networking and Telecommunications — Mobile Services: Percentage of Respondent Organizations Currently Purchasing (2004) and Projecting to Purchase (2005) by Vertical
 

Figure 71. 
 Networking and Telecommunications — Mobile Services: Percentage of Respondent Organizations Currently Purchasing (2004) and Projecting to Purchase (2005) by Company Size
 

Figure 72. 
 Networking and Telecommunications — Fixed Voice/Data Services: Percentage of Respondent Organizations Currently Purchasing (2004) and Projecting to Purchase (2005) by Vertical
 

Figure 73. 
 Networking and Telecommunications — Fixed Voice/Data Services: Percentage of Respondent Organizations Currently Purchasing (2004) and Projecting to Purchase (2005) by Company Size
 

Figure 74. 
 IT Services — Hardware Maintenance/Support: Percentage of Respondent Organizations Currently Purchasing (2004) and Projecting to Purchase (2005) by Vertical
 

Figure 75. 
 IT Services — Hardware Maintenance/Support: Percentage of Respondent Organizations Currently Purchasing (2004) and Projecting to Purchase (2005) by Company Size
 

Figure 76. 
 IT Services — Software Maintenance/Support: Percentage of Respondent Organizations Currently Purchasing (2004) and Projecting to Purchase (2005) by Vertical
 

Figure 77. 
 IT Services — Software Maintenance/Support: Percentage of Respondent Organizations Currently Purchasing (2004) and Projecting to Purchase (2005) by Company Size
 

Figure 78. 
 IT Services — Consulting: Percentage of Respondent Organizations Currently Purchasing (2004) and Projecting to Purchase (2005) by Vertical
 

Figure 79. 
 IT Services — Consulting: Percentage of Respondent Organizations Currently Purchasing (2004) and Projecting to Purchase (2005) by Company Size
 

Figure 80. 
 IT Services — Application Development/Integration Services: Percentage of Respondent Organizations Currently Purchasing (2004) and Projecting to Purchase (2005) by Vertical
 

Figure 81. 
 IT Services — Application Development/Integration Services: Percentage of Respondent Organizations Currently Purchasing (2004) and Projecting to Purchase (2005) by Company Size
 

Figure 82. 
 IT Services — IT Management: Percentage of Respondent Organizations Currently Purchasing (2004) and Projecting to Purchase (2005) by Vertical
 

Figure 83. 
 IT Services — IT Management: Percentage of Respondent Organizations Currently Purchasing (2004) and Projecting to Purchase (2005) by Company Size
 

Figure 84. 
 IT Services — Process Management: Percentage of Respondent Organizations Currently Purchasing (2004) and Projecting to Purchase (2005) by Vertical
 

Figure 85. 
 IT Services — Process Management: Percentage of Respondent Organizations Currently Purchasing (2004) and Projecting to Purchase (2005) by Company Size
 

Figure 86. 
 IT Services — IT Training: Percentage of Respondent Organizations Currently Purchasing (2004) and Projecting to Purchase (2005) by Vertical
 

Figure 87. 
 IT Services — IT Training: Percentage of Respondent Organizations Currently Purchasing (2004) and Projecting to Purchase (2005) by Company Size
 

Figure 88. 
 Vendor Purchasing Incidence Estimates: Hardware — Servers
 

Figure 89. 
 Vendor Purchasing Incidence Estimates: Hardware — Desktops
 

Figure 90. 
 Vendor Purchasing Incidence Estimates: Hardware — Notebooks
 

Figure 91. 
 Vendor Purchasing Incidence Estimates: Hardware — Handhelds
 

Figure 92. 
 Vendor Purchasing Incidence Estimates: Hardware — Storage
 

Figure 93. 
 Vendor Purchasing Incidence Estimates: Hardware — Input/Output Devices
 

Figure 94. 
 Vendor Purchasing Incidence Estimates: Hardware — Security
 

Figure 95. 
 Vendor Purchasing Incidence Estimates: Hardware — Tablet PCs
 

Figure 96. 
 Vendor Purchasing Incidence Estimates: Software — Back-Office
 

Figure 97. 
 Vendor Purchasing Incidence Estimates: Software — Collaborative/Personal
 

Figure 98. 
 Vendor Purchasing Incidence Estimates: Software — Front-Office
 

Figure 99. 
 Vendor Purchasing Incidence Estimates: Software — Application Development
 

Figure 100. 
 Vendor Purchasing Incidence Estimates: Software — Information Management
 

Figure 101. 
 Vendor Purchasing Incidence Estimates: Software — Systems
 

Figure 102. 
 Vendor Purchasing Incidence Estimates: Software — Design/Engineering
 

Figure 103. 
 Vendor Purchasing Incidence Estimates: Software — Security
 

Figure 104. 
 Vendor Purchasing Incidence Estimates: Networking and Telecommunications — Network Equipment/Applications
 

Figure 105. 
 Vendor Purchasing Incidence Estimates: Networking and Telecommunications — Mobile Handsets
 

Figure 106. 
 Vendor Purchasing Incidence Estimates: Networking and Telecommunications — Mobile Services
 

Figure 107. 
 Vendor Purchasing Incidence Estimates: Networking and Telecommunications — Fixed Voice/Data Services
 

Figure 108. 
 Vendor Purchasing Incidence Estimates: IT Services — Hardware Maintenance/Support
 

Figure 109. 
 Vendor Purchasing Incidence Estimates: IT Services — Software Maintenance/Support
 

Figure 110. 
 Vendor Purchasing Incidence Estimates: IT Services — Consulting
 

Figure 111. 
 Vendor Purchasing Incidence Estimates: IT Services — Application Development/Integration Services
 

Figure 112. 
 Vendor Purchasing Incidence Estimates: IT Services — IT Management
 

Figure 113. 
 Vendor Purchasing Incidence Estimates: IT Services — Process Management
 

Figure 114. 
 Vendor Purchasing Incidence Estimates: IT Services — IT Training
 

Figure 115. 
 IT Services Combined Index — Monthly
 

Figure 116. 
 Vendor Summary Indices (Accenture to MCI) — Monthly
 

Figure 117. 
 Vendor Summary Indices (Microsoft to Xerox) — Monthly
 

Figure 118. 
 Overall and Sector Indices — 13-Week Moving Averages
 

Figure 119. 
 Product Indices — Hardware — 13-Week Moving Averages
 

Figure 120. 
 Product Indices — Software — 13-Week Moving Averages
 

Figure 121. 
 Product Indices — Networking and Telecommunications — 13-Week Moving Averages
 

Figure 122. 
 Product Indices — IT Services — 13-Week Moving Averages
 

Figure 123. 
 Vendor Indices for Servers — Monthly
 

Figure 124. 
 Vendor Indices for Desktops — Monthly
 

Figure 125. 
 Vendor Indices for Notebooks — Monthly
 

Figure 126. 
 Vendor Indices for Handhelds — Monthly
 

Figure 127. 
 Vendor Indices for Storage Hardware — Monthly
 

Figure 128. 
 Vendor Indices for Input/Output Devices — Monthly
 

Figure 129. 
 Vendor Indices for Security Hardware — Monthly
 

Figure 130. 
 Vendor Indices for Tablet PCs — Monthly
 

Figure 131. 
 Vendor Indices for Back-Office Software — Monthly
 

Figure 132. 
 Vendor Indices for Collaborative/Personal Software — Monthly
 

Figure 133. 
 Vendor Indices for Front-Office Software — Monthly
 

Figure 134. 
 Vendor Indices for Application Development Software — Monthly
 

Figure 135. 
 Vendor Indices for Information Management Software — Monthly
 

Figure 136. 
 Vendor Indices for Systems Software — Monthly
 

Figure 137. 
 Vendor Indices for Design/Engineering Software — Monthly
 

Figure 138. 
 Vendor Indices for Security Software — Monthly
 

Figure 139. 
 Vendor Indices for Network Equipment/Applications — Monthly
 

Figure 140. 
 Vendor Indices for Mobile Handsets — Monthly
 

Figure 141. 
 Vendor Indices for Mobile Services — Monthly
 

Figure 142. 
 Vendor Indices for Fixed Voice/Data Services — Monthly
 

Figure 143. 
 Vendor Indices for Hardware Maintenance/Support — Monthly
 

Figure 144. 
 Vendor Indices for Software Maintenance/Support — Monthly
 

Figure 145. 
 Vendor Indices for Consulting — Monthly
 

Figure 146. 
 Vendor Indices for Application Development/Integration Services — Monthly
 

Figure 147. 
 Vendor Indices for IT Management — Monthly
 

Figure 148. 
 Vendor Indices for Process Management — Monthly
 

Figure 149. 
 Vendor Indices for IT Training — Monthly
 

Figure 150. 
 Sample Breakdown by Vertical — January Through November 2004
 

Figure 151. 
 Sample Breakdown by Subvertical — Services — January Through November 2004
 

Figure 152. 
 Sample Breakdown by Subvertical — Manufacturing — January Through November 2004
 

Figure 153. 
 Sample Breakdown by Subvertical — Education Services — January Through November 2004
 

Figure 154. 
 Sample Breakdown by Subvertical — Financial Services — January Through November 2004
 

Figure 155. 
 Sample Breakdown by Subvertical — Government (State, County and Local) — January Through November 2004
 

Figure 156. 
 Sample Breakdown by Subvertical — Health Services — January Through November 2004
 

Figure 157. 
 Sample Breakdown by Subvertical — Retail Trade — January Through November 2004
 

Figure 158. 
 Sample Breakdown by Subvertical — Agriculture, Mining and Construction — January Through November 2004
 

Figure 159. 
 Sample Breakdown by Subvertical — Communications — January Through November 2004
 

Figure 160. 
 Sample Breakdown by Subvertical — Wholesale — January Through November 2004
 

Figure 161. 
 Sample Breakdown by Subvertical — Transportation — January Through November 2004
 

Figure 162. 
 Sample Breakdown by Subvertical — Government (Federal) — January Through November 2004
 

Figure 163. 
 Sample Breakdown by Subvertical — Utilities — January Through November 2004
 



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