Gartner Technology Demand Index Shows IT Spending Remained Soft in October, Although Expected Increases Point to Optimism for 2004
STAMFORD, Conn., November 14, 2003 — According to a weekly poll of IT decision makers in small, midsize and large public and private organizations, U.S. enterprises continued to spend below their budgeted levels. The Gartner Technology Demand Index for October recorded a score of 85. An index value of 100 means businesses spent exactly what they had budgeted for the month. In September, the index totaled 87.
"These results show continued reluctance by IT decision-makers to release budgeted dollars," said Martin Reynolds, group vice president and research fellow at Gartner. "In a change, however, overall projected demand for 2004 has rebounded to levels approaching the highs of last June and July. A major question in the final weeks of 2003 will be what decision makers decide to do with any unspent dollars."
The Gartner Technology Demand Index shows anticipation of increased spending in 2004 among midsize companies (100 to 999 employees) and large organizations (1,000 or more employees). Renewed vigor in these two sectors is key to driving sustainable growth in demand for IT products and services. Midsize and large companies represent 44 percent of IT spending power.
The IT Watch Vendor Demand Index measures IT decision makers' purchase preferences across more than 400 vendors by sector and product. Vendors ranked high by this measure stand to gain the most in demand in 2004 relative to 2003.
The third quarter vendor index indicates that, as the server market recovers, Dell stands to gain share at a faster pace than its key server competitors, Hewlett-Packard and Sun Microsystems. The third-quarter vendor index for Dell is 114, ahead of HP at 108. Sun's strong historical position is being challenged. Its October demand Index is at 99, reflecting a decline in its market position.
The Gartner Technology Demand Index is an offering within Gartner IT Watch. Gartner IT Watch uses results from weekly polling of 25,000 IT decision makers to produce an early warning indicator for investment professionals and vendors. Gartner IT Watch captures short-term and long-term attitudes toward investment in IT products and services, and reflects anticipated changes in spending trends because of current events and broader economic factors.
Analysis is provided monthly for the overall IT market and is further broken out to provide insight into current and projected spending in vertical industries. It also identifies vendors and products that will lead recoveries or play a shaping role in IT spending patterns. For more information on Gartner IT Watch, e-mail ITWatch@gartner.com or visit www.gartner.com/1_researchanalysis/ITwatch.jsp.
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