Study: IT Spending Not Down in Wake of Attacks

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.