Security still top IT spending priority

A recent survey of 100 IT executives predicts that IT spending will decrease slightly in 2006 as more businesses worry about global economic conditions, but security software and enterprise IT upgrades remain top concerns, according to Goldman Sachs.

Macroeconomic factors, such as high oil prices and a devastating hurricane season in the United States, have caused 40% of the executives to consider reducing their 2006 IT budgets, according to survey results released last week. Fifty-two percent believe their IT spending will be unchanged in 2006 from 2005.

Security software has been a long-running priority among the executives on Goldman’s survey panel, and that mind-set hasn’t changed, according to the current results. Spending on anti-virus products has eased after a flurry of activity, but CIOs continue to focus on improving security in identity management and regulatory compliance, the survey says.

Other corporate software priorities include ERP and CRM , with CIOs upgrading these categories to top priorities. When Goldman polled its panel in April, both were considered medium priorities.

Among enterprise-software vendors, VMware and SAP AG were the two most-cited companies that are receiving an increasing percentage of the respondents’ IT budgets. Virtualization technologies are hot this year, as Intel and Advanced Micro Devices prepare chips that improve the performance of virtualization software. On the downside, respondents listed Novell and Computer Associates as receiving less of their IT budgets.

When it comes to choosing hardware for their new software, IT executives listed servers using Microsoft’s Windows OS as a top priority, an upgrade from the April survey. Unix servers also received an upgrade, but are considered a medium priority among Goldman’s respondents.

Dell and IBM are receiving larger shares of IT budgets. Goldman suggested that given Dell’s financial results from the past two quarters, aggressive discounts may have played a role in Dell’s performance among respondents. HP is losing its share of respondents’ IT budgets, but Goldman expects the company’s performance to improve over the next year.

Dell also is gaining share in the PC portion of respondents’ IT budgets, while HP is losing share. Goldman attributed HP’s performance to increased discipline about the markets in which it participates. Lenovo Group did not gain or lose share among the survey respondents, an improvement from the previous survey conducted after Lenovo completed its acquisition of IBM’s PC business.

On outsourcing , 24% say they expect their interest in paying someone else to manage the data center or desktops to increase. With economic conditions on the minds of IT executives, reducing their costs by outsourcing these functions is expected to become more popular, according to Goldman.

Fifty-three percent of Goldman’s survey respondents hold the title of CIO, while 22% are vice presidents of IT or IS and 15% are directors of MIS or IT. Eighty-two percent of the respondents work for companies that have yearly revenue of $500 million or greater, and 52% of the companies have more than 10,000 employees worldwide.