European firms set to curb IT spend in 2006
Analyst Gartner predicts a healthy portable market as spending on desktops and servers drops
Resellers will have to think smarter to win business next year as investment in IT is going to grow by just four per cent in 2006, according to Gartner.
Gartner’s latest research has revealed that European organisations plan to increase their investments in IT, but only at the minimum level necessary to maintain IT departments and support the business.
The report claimed spending on security hardware, software and portable devices such as mobile handsets, laptops, PDAs and tablet PCs will see healthy growth. Desktops will experience minimal growth and servers will see a decline, according to Gartner.
Roger Fulton, vice-president of research at Gartner, said the outlook is not rosy for the UK.
“We’re seeing spending in IT falling in the UK. This year there will be a six per cent growth and next year just four per cent growth, which is pretty low.
“There is less money around because of economic restraints. The challenge for IT departments is to bring their running costs down so they can free up money to invest in IT. This is what VARs need to take into consideration,” he said.
Fulton added that VARs should also try to make customers understand that holding onto old IT infrastructure is not always the best money-saving option.
“It is usually more cost effective to invest in the next generation of equipment because it can provide more capacity and has lower maintenance costs,” he said.
However, Pierre Lams, co-founder of VAR Handheld PCs, said his firm is benefiting from the refresh cycle slowdown.
“We have been tracking the economic situation and realise that next year will be tough,” he said.
“However, we actually look set to benefit from this as businesses wanting to invest in IT are turning to mobility products. Instead of doing a major technology refresh, which can cost big bucks, companies are taking advantage of mobility initiatives that can work with their existing IT infrastructure. Our turnover has doubled this year and we are predicting the same next year.”