With IT budgets tight, most chief information officers are consolidating purchases with larger vendors with strong brands and the ability to provide a wide variety of products and services, a survey has found.
The main beneficiary from this trend is IBM, followed by Dell Computer, Cisco and Hewlett-Packard, according to a survey of 100 CIOs conducted by the research department of investment bank Merrill Lynch.
Eighty percent of respondents said they are consolidating purchases with larger vendors, while 5% said they were shifting purchases to smaller vendors. The rest reported no change either way in their purchasing strategy.
New York-based Merrill Lynch polled 75 CIOs in the U.S. and 25 in Europe, and released the survey results on Monday.
Other survey findings include:
Areas in which respondents said they are spending more this year than originally planned are security, consulting and outsourcing.
Respondents are spending less than planned this year on computer hardware, communications equipment and software.
IT spending in the fourth quarter will be either flat or down slightly compared with last year's fourth quarter.
Compared with this year's third quarter, IT spending will be up about 9% during the fourth quarter. This has been the average growth rate in the past three years when comparing sequential growth from a year's third to the fourth quarter. However, between 1992 and 2001, sequential growth from the third to the fourth quarter averaged 17%.
Respondents' IT spending will drop an average of 2% in 2002 over 2001, and is expected to grow 3% in 2003 over 2002.
A recent survey of 100 CIOs from U.S. firms conducted by Merrill Lynch competitor The Goldman Sachs Group forecasts a similar increase in IT spending of between 2% and 3% in 2003 over 2002.
The IDG News Service is a Network World affiliate.
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