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Setting your IT spending priorities

By Linda Musthaler
Network World, 07/09/01

It has been a wild couple of years for the IT industry, with double-digit growth rates in IT budgets since the late 1990s. Many organizations went hog-wild on their IT spending in preparation for Y2K and in response to the growing phenomena of e-commerce and the Internet. But since about mid-2000, global IT spending has hit the skids, slowing to a growth rate of only 8.6%, according to market research firm IDC. One IT vendor after another is reporting disappointing sales as major customers curtail purchasing. Your organization is probably among them.

Further exacerbating the spending slowdown is the fact that there are few truly hot, must-have technologies on the market. Many companies have just gone through the migration to Windows 2000, or the installation of applications such as customer relationship management or enterprise resource planning, meaning their extensive hardware and software purchases are behind them. It's too soon to think about new hardware or software to accommodate Windows XP or .Net, and although Intel has nifty new Pentium 4-based computers on the market, they aren't sexy enough to warrant massive purchases. What's more, many companies are delaying upgrades in software purchases as well.

Though your management may have instructed you to cut your IT budget and extend the use of the systems you have in place, there are some areas where it makes sense to continue to invest in new technology. Of course, your top priority has to be any system that supports revenue generation or reasonable cost-cutting for your company. But don't stop there. Try to convince management to shake loose a few dollars for a few other beneficial IT investments. Wireless, storage and security look like good bets for continued investment.

Wireless computing is must-have technology. There's nothing like the freedom of being able to anywhere yet still maintain as much connectivity as you want to your office. After many years of being almost ready for prime time, the technology pieces to the wireless puzzle are falling into place, from feature-packed devices to worthwhile applications to decent connectivity and access.

Your plan to implement wireless computing should include four fronts. First, install wireless LANs in your office or campus, allowing employees or students to move about freely while still having access to the enterprise network through their laptops.

Second, give PDAs to your most mobile professionals who abhor the weight of even the lightest notebook. A general-purpose PDA, like a Palm Pilot or Compaq iPAQ, is a useful tool, or you can select a single-purpose device like a BlackBerry PDA for wireless e-mail.

Third, invest in point solutions for a specific trade or task. For example, retail clerks should carry a PDA that will allow them to quickly access inventory and pricing information.

Finally, make sure your organization's Web site is optimized for access by wireless devices. With the world going wireless, your customers and business partners will need to access your site(s) via their PDAs and Wireless Application Protocol-enabled phones.

As content grows more prolific, so does the need for enterprise storage - the second good investment for your IT budget. As Dhruv Gulati of systems integrator Lilien Systems puts it, storage "has become like gasoline: It doesn't matter what the economy is like, companies have to store what they need, and they need access to it."

Storage products come in all price ranges and form factors, so it's easy to find something that matches your needs and budget. What's more, storage is one technology area that has some exciting new developments, making it worthwhile to migrate to something new, like a storage-area network. Keep your eye on the developments of the iSCSI standard, which should yield products in about a year and further drive down the costs and drive up the capabilities of storage systems.

My third area of recommended IT investment for 2001 is security. Simply put, you can't be without it. What's more, security enhancements must be ongoing, as the challenges and threats change constantly. You can't put in a security system once and think that takes care of all your needs for the next year or two. Fortunately, CEOs and CFOs understand the grave consequences of a breach of security to IT systems, so getting them to ante up the money for these investments shouldn't be difficult, even during an economic slump.

IT budget dollars may be tight for the next six to 12 months, but some technology purchases are still worth the investment.