IT, Telecom Infrastructure Spending Creeping Up Worldwide

Corporations and service providers finally are feeling comfortable about making the technology infrastructure investments they have delayed during the economic slump.

In the enterprise market, a study released this week by the Yankee Group finds that 80 percent of businesses surveyed will be undertaking major upgrades by the end of the year. The survey of 1,100 IT administrators around the world found that enterprise infrastructure upgrades will range from client/server upgrades to new COTS application deployments and custom application development.

While spending is up, buyers still will be demanding high value and quick ROI. "The severe and prolonged economic constraints of the past three years are not forgotten," said Laura DiDio, a Yankee Group senior analyst in a statement. "On the contrary, businesses are just as cautious, and more demanding than ever about receiving full value and a tangible ROI for every dollar they spend."

In addition to an improvement in demand for hardware and software, the market for IT services also is improving. A recent Gartner study reported that global spending on IT services grew by 6.2 percent last year"reaching $569 billion.

U.S. vendors dominated that market, capturing 59 percent of total IT services spending. IBM led all vendors with $42.6 billion in revenues. Its revenues were almost exactly twice that of the second-largest player, EDS. In third place was Fujitsu, with $16.1 billion in IT services revenue.Going forward, Gartner sees outsourcing as a key component of increased demand for IT services. IT management and process management will outpace the growth of consulting services.

Service providers and carriers also are beginning to loosen their purse strings.

Another study by Yankee Group finds that the wireless equipment market is starting to pick up ever so slightly, with a one percent rise, globally, predicted for this year. The Yankee study shows spending up significantly in the Asia-Pacific region, with revenues jumping by 29 percent between 2002 and 2004.

The Asia Pacific region also is seeing increased spending for landline networks. Chinese telecom equipment provider ZTE just announced that it was awarded a contract by Indonesian carrier Telkom to build the NGN-DLC (Digital Loop Carrier) network in the Jakarta metropolitan area. The network will provide advanced and broadband services such as ISDN, ADSL, SHDSL and HDSL, as well as POTS.