Forrester study says tech spending to drop 14% by large companies

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Cambridge, Mass.--Spending on e-business technologies will drop to 3% of revenue in 2002 from an average of 3.5% in 2001, according to a study released Monday by Forrester Research Inc.

The study, which took the pulse of about 900 high-level information technology executives and business decision-makers at Global 3,500 companies (businesses with more than $1 billion in revenue), found that the average 2002 e-business technology budget is $29 million, compared with $41 million in 2001. It also found that business executives expect a more significant drop in spending than their IT colleagues do.

Compared with 2001, 23% fewer companies will consider purchasing server, network and storage hardware. Meanwhile, fewer than half the companies surveyed will consider purchasing enterprise application software such as customer relationship management, enterprise resource planning, supply chain and procurement in 2002.

Despite the recent cutbacks, businesses are still bullish on the Web for the long term.

“Our survey also found that Global 3,500 executives estimate their online-generated 2002 revenues at 7.3% of overall corporate revenues, compared with 5.7% in 2001," said Tom Pohlmann, senior analyst at Forrester. "They also estimate that in five years, online revenue will comprise 20% of total corporate revenues. Despite the economic downturn, companies still believe that technology will make a huge difference in driving business results.''

--Matthew Schwartz

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