Large businesses appear to be moving up technology spending plans, a development that could strengthen the normally weak first quarter, Goldman Sachs analyst Laura Conigliaro said on Tuesday.
Goldman's latest survey of technology spending, conducted in mid-December, reflects "a level of increased optimism not seen for more than a year and a half," Conigliaro said in a note to clients.
Even so, the survey also suggests that the improvements in spending will be gradual: Information technology executives who responded said they expect overall IT budgets to grow by 1.5% this year, while capital expenditures increase by just 0.9%.
Surprisingly, 58% of the execs surveyed expect spending levels in the first quarter to match those of the seasonally strong fourth quarter, while an additional 25% indicate that first-quarter 2004 spending growth will exceed that of fourth-quarter 2003.
"Although we doubt that a tech spending recovery will go so far as to entirely override typical first-quarter seasonality, our survey could at least be signaling the possibility of a slightly better-than-seasonal first quarter," Conigliaro wrote.
Unlike other recent surveys, Goldman found that IT executives have lowered the priority of spending for new notebook and desktop PCs, while raising the priority of spending for communications-related categories including gigabit Ethernet networking (a fast networking technology).
Companies cited by respondents as gaining share of their IT dollars included
Check Point Software
This marks the first time in more than 18 months that H-P emerged as a leading share gainer in Goldman's survey. The combination of an improved standing in outsourcing services, along with new, lower-cost
-based offerings, are apparently resonating with IT users.