IT Spending Coughs & Splutters

Server spending may be on the up, but CIOs are hardly splashing money around like lottery winners, according to industry analysts.

This morning IDC painted a rosy picture in its latest report on the state of the server market. Factory revenues grew to $11.5 billion in the third quarter of 2004, marking the sixth consecutive quarter of revenue growth, according to the research company (see IDC Sees Growth in Linux, Blade Servers).

But that doesnt mean CIOs are emptying their wallets with wild abandon. A recent IT spending report from Goldman Sachs & Co. presented a much more sober outlook. Its survey of about 100 IT managers concluded that, for the second year, overall spending growth is stuck in the low single digits.

Goldman Sachs reckons spending on new hardware and software will grow at an "unexciting" 3.4 percent in 2004, though this is, at least, way better than the decidedly depressing forecast of 0.4 percent reported back in August.

Clearly, the IT industry is taking its time to emerge from the doldrums. This is hardly surprising: Users, having survived the economic downturn, are being extremely cautious with their capital expenditure (see Are We out of the Woods Yet?).