2003 Technology Spending Will Only Grow 1.9 Percent Over 2002, According To Forrester Research; Opportunities Still Exist For Storage And Supply Chain Applications.

Business Editors/High-Tech Writers

CAMBRIDGE, Mass.--(BUSINESS WIRE)--March 3, 2003

2002 was a year of IT budget cuts, postponed enterprise apps purchases, and a weakening IT services market. In an economy that has not improved much since, vendors need to know where to look for buyers. Based on a Forrester Research, Inc. (Nasdaq: FORR) Business Technographics(R) Benchmark Survey of nearly 900 high-level IT and business decision-makers, manufacturers, retailers, and services companies are viable prospects for growth.

"IT products and services that shave costs through efficiency gains, help retain customers, or solve the burgeoning integration dilemma in corporate IT have the best chance at success this year," said Tom Pohlmann, research director at Forrester.

The 1.9 percent IT spending rise was bolstered by a 2.6 percent spending hike at midsize firms. The survey also revealed that finished goods manufacturing will increase spending by 7.4 percent, and high-tech's own IT spending will rebound after a rough 2002. Meanwhile, the financial sector has reversed course to negative growth, although it still spends the most on IT.

Additional Key Findings

-- In mid-2002, fewer than one in five firms were considering a CRM or ERP software purchase. Demand for both has returned to pre-2002 levels.

-- Forty-five percent of companies will buy business intelligence tools in 2003, including data mining and analytics software.

-- Sixty percent of firms will buy disaster recovery products or services, paced by healthy budgets in manufacturing.

-- Thirty-six percent of IT shops will reduce their use of outside consultants and contractors from last year's levels, continuing a well-established trend.

-- The number of firms completing at least one project involving a Web services standard, such as XML or SOAP, grew from 11 percent at the midpoint of 2002 to 31 percent currently.

-- Many firms are balancing centralized governance of IT with business unit involvement. Thirty-four percent of companies describe business unit leaders outside of IT as being "very involved" in setting IT priorities and direction.

For the February 2003 Forrester report "Benchmark North America: Business Technographics Data Overview," Forrester surveyed 877 executives, directors, and managers at North American companies. Fifty-four percent of survey respondents work at firms with at least $1 billion in revenues, while the remainder work at firms with between $500 million and $1 billion in revenues.

Forrester Research enables companies to understand the impact of technology on business. Forrester's WholeView(TM) Research, Strategic Services, and Events help clients understand how technology change affects their customers, strategy, and technology investment. Giga, through its Giga Advisory(R), Giga Consulting(TM), and Events, provides objective research, pragmatic advice, and personalized consulting to global IT professionals. Established in 1983, Forrester is headquartered in Cambridge, Mass. For additional information, visit www.forrester.com.