IT budgets to rise as Vista bites

U.K. companies' IT spending is likely to grow above inflation this year, with Windows Vista and mobile computing hardware consuming much of the increase, a new study from the National Computing Centre (NCC) has said.

The NCC's findings, based on a survey of 120 U.K. companies, contrasts with recent reports from the likes of IDC and Gartner. IDC said that server expenditure could fall in 2008, while Gartner warned companies to begin cutting IT spending ahead of a possible recession.

The NCC found that 58% of the respondents planned on above-inflation rises in IT spend. The companies surveyed had an average annual turnover of £267 million ($530 million) and an average annual IT budget of £6.25 million. The construction and health sectors predicted the strongest growth.

The survey, The Benchmark of IT Spending 2008, pegged the median growth rate in IT expenditure at 4.9 percent, compared to January's consumer price index (CPI) figure of 2.2%.

Despite the reluctance of many businesses to adopt Windows Vista so far, the latest Microsoft operating system was one of the biggest targets of planned spending.

Windows XP is currently used by 71% of respondents, but in two years' time Vista will dominate, with 75% of responding organizations having adopted it, the NCC said.

Companies have played it safe so far on Vista, but seem to have decided that the early bugs have been ironed out well enough to add Vista into their approaching desktop refresh cycles, the NCC said.

Laptops will increase by 57% over the next two years, while the number of PDAs will grow by 134%. Desktops will decline by 2%.

Other beneficiaries of increased spending will include virtualization, storage-area networks, VoIP and ITIL-based business process management applications.