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 percent of the respondents planned on above-inflation
rises in IT spend. The companies surveyed had an average annual turnover of
£267 million (US$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 percent.

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 percent of respondents, but in two years'
time Vista will dominate, with 75 percent 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 percent over the next two years, while the number
of PDAs will grow by 134 percent. Desktops will decline by 2 percent.

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