Study: IT Spending Not Down in Wake of Attacks

By Aaron Goldberg  |  Posted 2001-10-05 Print this article Print

A research study conducted by Ziff Davis Media's Market Experts Group found there are very few IT organizations that are planning to do any trimming of their budgets; however, spending priorities do change.

NEW YORK -- The terrorist attack of Sept. 11 has cast quite a shadow on the technology industry and IT professionals. Now that we have had more than two weeks to assess the impact, its clear that some of the early pessimistic prognostications about the impact of this tragedy on IT budgets was wrong. According to a recent research study conducted by Ziff Davis Medias Market Experts Group, there are very few IT organizations that are planning to do any trimming of their budgets. The study contacted more than 400 IT professionals from a wide variety of companies and indicates that nearly 60 percent of the respondents companies intend to maintain fourth-quarter IT expenditures at the same level as originally budgeted before Sept. 11. Yet, the biggest news is that for those companies that are making changes, a larger percentage will actually be increasing budgets, rather than decreasing them. And this trend in steady or slightly increasing spending is true among different-size companies.
There are, however, significant changes in where those budget dollars will be spent as a result of this attack. Obviously, security issues have come to the fore. The biggest change in budget dollars is a shift toward spending more for security software, VPNs and other tools to protect the network. In addition, there will be an increase in spending on the communications infrastructure to ensure a functional, yet secure network. One of the hardware product areas that will also benefit from this focus on the communication area will be storage, as companies find they must protect and back up their data more rigorously.
Another area of growth is employee identification, with more than 40 percent of these senior IT professionals reporting they will increase use of employee identification technology and smart cards. Even more compelling, the employees themselves are excited about new and improved identification procedures to enhance personal security. Despite this move to improve identification, the use of biometrics is not very widely planned at all at this time. The study also highlighted growing interest among IT professionals in such security-related technologies as virtual private networks (VPNs), public key infrastructure (PKI), encryption software, content-filtering software and intrusion-detection software. In addition, the survey pointed out a strong interest among smaller companies in beefing up their IT security. Respondents from smaller companies were actually more likely than those in larger ones to say they intend to initiate or expand their use of those security-related technologies. Larger firms are more interested in spending on videoconferencing, hot sites and hosting services. Among the areas that will see reduced investment, the biggest change is for computer systems such as servers and client PCs, with nearly half of those respondents who said they intend to cut fourth-quarter spending indicating servers and PCs will be the first to be reduced. However, this is most pronounced at smaller firms. Larger firms are actually a bit more bullish on PC purchasing. Other product areas likely to be cut by these respondents are packaged applications software and e-business application software. Aaron Goldberg is vice president of Ziff Davis Medias Market Experts Group.
Mr. Goldberg is a renowned analyst, columnist, and strategic visionary covering the computer and Internet industries. His point of view is well known for its succinct, realistic, and down to earth style. His ability to integrate the technology, market and human factors in forecasting high technology is legendary.

He has more than 22 years experience in understanding the product/channel/customer equation in these industries and has the unique ability to understand the inter-relationships among these factors. This allows Mr. Goldberg to uniquely present scenarios on industry and vendor directions that are uncannily accurate.

In his current role at Ziff-Davis, Mr. Goldberg is charged with developing comprehensive market analyses and building integrated marketing programs and customer development programs for Information Technology vendors. His ability to understand the dynamic between customers, products, services, and their usage trends enables him to build hard hitting, unique programs that deliver the results for tactical and strategic marketing programs. This position demands the ability to work with senior executives in these IT firms as well as key partners in the media world.

Mr. Goldberg is also charged with presenting key industry trends and research findings at major industry events and in various web sites and publications.

At the present time he is a regular contributor to ZDNet, and contributor for Upside Magazine, Wall Street Journal, Marketing Computers, and eWEEK.

Prior to his current role, Mr. Goldberg was Executive Vice President at Ziff-Davis Market Intelligence, building state of the art go-to-market systems for high tech vendors. He has also served as Chief Executive Officer of InfoCorp. Prior to Ziff-Davis, Mr. Goldberg was employed at International Data Corporation for 15 years. He worked in a number of positions, and ended his employment there as Senior Vice President of the Desktop Computing Group.

Mr. Goldberg received a BS degree from Bentley College in Marketing/Management, with directed studies in statistics and organizational behavior. He resides in Massachusetts with his family.

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