PC, Laptop Upgrades Dominate IT Budget Plans

 
 
By Lisa Vaas  |  Posted 2004-08-25
 
 
 
At this point in the year, laptop and PC upgrades are clocking in as the top priority for IT budgets, according to research from Forrester Research Inc.

Forrester in June surveyed 1,377 North American and European businesses regarding their IT purchasing and spending plans for the rest of the year. During the second quarter, 89 percent of enterprises and 95 percent of SMBs (small and midsized businesses) planned to replace or upgrade some portion of their PCs over the next year, with finance and insurance companies planning to upgrade the highest percentage—31 percent—of their PCs.

Nicholas Wilkoff, one of the Forrester analysts who authored the report, said the results validate what Forrester had been hearing leading into 2004: that the theme for IT spending is still to focus on basics such as upgrading security and upgrading infrastructure, such as PCs and Windows on the desktop.

This has been a focus for the past few years, Wilkoff said, although there are signs that businesses are stirring from this cautious approach. "Were seeing some signs that theyre starting to slowly get out of that mindset," said Wilkoff, in Cambridge, Mass.

One key point underscoring a renewing confidence is that in Forresters midyear study, businesses were asked what percentage of budgets are going to new projects versus ongoing maintenance. Businesses at that point reported that 30 percent will go to new initiatives, which is up from 21 percent at the same time a year earlier.

In another sign of growing confidence, businesses reported a greater percentage of IT budgets being earmarked for research and development, Wilkoff said, rather than just the core ongoing operations and maintenance of tasks and strategies.

"I think [caution] is still more or less [the mindset], but theres evidence over the next two to three years that IT buyers will come out of that," he said. Depending on the sector, the hot new IT projects could be RFID (radio frequency identification) for retail and manufacturing, for one, he said.

When looking at SMBs, the business services industry is upgrading PCs at the fastest clip, with plans to replace about 26 percent of PCs.

Businesses plans to upgrade include replacing a good portion of PCs with laptops: 24 percent of total PC purchases will be targeted at laptops, even though they tend to be more expensive than desktops.

Whats going to become of those discarded PCs? Click here for a column on corporate accountability for electronics disposal.

Of the 20 percent of PCs that utilities and telecom firms plan on replacing, 29 percent will get swapped out for laptops. The public sector will devote only 17 percent of PC purchase funds to laptops.

Whos going to be selling all of these PCs and laptops? Dell Inc. dominates mindshare, Forrester reported, with 79 percent of SMBs and 57 percent of enterprises buying from the company. Business services SMBs love Dell the most, with 82 percent planning on buying from the company.

That love factor drops off in financial and insurance businesses, where only 48 percent plan on buying Dell. Of that industry, 33 percent are instead looking to Hewlett-Packard Co. to get their PC fix, which is a good deal larger than the 24 percent of all industries that plan to buy from HP.

Check out eWEEK.coms Desktop & Notebook Center at http://desktop.eweek.com for the latest news in desktop and notebook computing.

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