IT Executives Expect to Increase Budgets, According to New Aberdeen Group Study

BOSTON, MA — September 24, 2002 -- Senior information technology executives plan to increase their budgets by an average of 3.7% over the next six-12 months, according to a recent survey by Aberdeen Group, a leading market analysis and positioning services firm.

"We believe that this expected budget increase is indicative of a nascent resurgence in IT spending, especially since the same survey group indicated they planned to decrease budgets by 1.4% back in February of this year," said Hugh Bishop, Aberdeen Senior Vice President and co-author of the survey report 2002 User Buying Intentions Update. "We expect IT purchasing to recover gradually, however, and are not forecasting a return to the hyper-growth of the late 1990s."

In addition to overall spending, the survey examined buying intentions and priorities for 35 application software categories and 11 technology infrastructure sectors. Among the survey`s buying intention findings for the application category were:
· 48.0% of respondents indicated they intend to purchase sales force automation applications;
· 45.2% of respondents indicated they intend to purchase query, reporting and analysis tools;
· 44.9% of respondents indicated they intend to purchase help desk and field service applications;
· 44.7% of respondents indicated they intend to purchase finance and accounting systems; and
· 44.2% of respondents indicated they intend to purchase data mining applications.

"Applications with proven track records and definitive ROI will win in the short term and technology suppliers that fail to demonstrate a short payback period for their solutions are likely to find their proposals put on hold until economic conditions improve," Bishop continued.

In terms of buying intentions for technology infrastructure, Aberdeen found:
· 72.0% of respondents indicated they intend to purchase network and system management pplications;
· 60.0% of respondents indicated they intend to purchase security gateways and services;
· 52.0% of respondents indicated they intend to purchase storage management solutions;
· 52.0% of respondents indicated they intend to purchase application development tools; and
· 48.0% of respondents indicated they intend to purchase backup and recovery software.

"User organizations continue to be most concerned with protecting and preserving their existing IT investments and are less concerned with building additional integration points," he added. "Whereas the events of September 11th were a likely catalyst for this trend earlier in the year, the continued importance of these infrastructure purchases point to sustained economic uncertainty and the need to maximize the return on assets."

Aberdeen`s survey also examined hardware spending expectations and found that with the exception of mainframes and handheld devices, users continued to expect to slightly increase spending in hardware during 2002, with growth rates ranging from 2.0% to 2.5%. Unlike previous results, which showed across the board increases as high as 10.2%, the updated figures are much more conservative, as would be expected given the economic difficulties in the world economy.

The full report can be obtained via Aberdeen`s web site here: 2002 User Buying Intentions Update, by calling 800-577-7891, or via email at info@aberdeen.com.

About Aberdeen
Founded in 1998, Aberdeen Group is a leading IT market analysis and positioning services firm that helps Information Technology vendors establish leadership in emerging markets. The firm provides IT market intelligence, positioning, and market acceleration services to established and start-up technology companies. Aberdeen`s consultants provide up-to-the-minute global IT market insights in more than 25 IT market segments. Research practices focus on emerging market opportunities, market growth rates, important industry trends, and customer buying patterns. The firm also helps clients to identify new market opportunities, enter those markets successfully, and accelerate the adoption of new technologies.

Headquartered in Boston, Massachusetts, Aberdeen has research and consulting divisions in Palo Alto, California; Fort Collins, Colorado; and Amsterdam, the Netherlands.

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