IT expenditure set to beat inflation says NCC

More than half - 58 per cent - of respondents to the National Computing Centre̵7;s Benchmark of IT Spending 2008 survey are predicting an above-inflation increase in IT expenditure over the next 12 months.

The median growth rate in IT expenditure reported is 4.9 per cent (against January 2008's consumer price index figure of 2.2 per cent), with the construction and health sectors predicting the highest growth.

Microsoft is set to be a key beneficiary of the increased spending. Although Windows XP dominates the server marketplace, with 71 per cent of respondents using it, in two years' time Microsoft Vista will be used in 75 per cent of responding organisations, the survey reckons.

The machine that runs Vista is increasingly likely to be a laptop, as respondents report that the number of laptop systems will increase by 57 per cent in the next two years; while over the same period respondents expect the number of PDAs to grow by 134 per cent. The aggregate number of desktops, meanwhile, is expected to decline by 2 per cent.

Virtualisation and storage area networks (SANs) also feature prominently on the IT shopping list. Voice over IP (VoIP) remains the most popular communications investment, while the growing adoption of ITIL is generating noticeable interest in business process management applications.

"IT purchasers are remaining confident about future economic conditions; they are making sure that their businesses have the right technology to deliver growth over the coming years - but they are not over optimistic," said NCC managing director Stefan Foster (pictured, right). "Typically operational spending averaged 39 per cent of total IT expenditure, while staff costs represented 35 per cent of the budget, and capital/development spending was 20 per cent."

The Benchmark of IT Spending 2008 identified offshore outsourcing as the biggest growth area for outsourcing per se: some 26 per cent of respondents currently offshore overseas; 31 per cent say they will be doing this in two years' time.

The median level of IT staffing is 29.4 IT staff per 1,000 end users - an increase of 1.3 compared to the last NCC survey, but there is significant variance between sectors.

The benchmark provides an appraisal of IT spending levels and spending ratios, enabling organisations to benchmark their IT spending in support of their decision making. Based on responses from 120 organisations who between them reported an aggregate turnover/revenue of over £32bn and an aggregate IT spend of just over £750m.

Further information:

Image: NCC managing director Stefan Foster believes IT purchasers remain confident, but not over optimistic

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