India, China bullish on IT spending in 03

HONG KONG: About half of Asia's private companies plan to increase spending on information technology this year, with most activity focused on maintaining existing systems, according to a survey.

The mixed message reflects similar sentiment from major technology firms, which have generally reported strong fourth-quarter results but tempered the news with a cautious outlook for 2003.

Indian companies were the most bullish in the region, with more than 67 percent indicating they planned to increase IT spending this year from 2002, according to IDC Asia/Pacific, which polled nearly 900 executives.

Chinese companies were also bullish, with 55 percent saying they planned to increase IT spending.

At the other end of the spectrum, Taiwanese, Korean and Japanese firms were the most bearish, with more than 60 percent in each country saying they planned to keep their 2003 IT spending at or below previous year levels.

Respondents indicated, on average, that 70 percent of their IT spending this year will go to routine infrastructure, while 16 percent or less will go toward new and existing projects.

"Survey respondents suggested that although budgets will increase in 2003, the lack of spending on new IT initiatives will continue throughout the year," said Dane Anderson, vice president of consulting and IT research at IDC Asia/Pacific.

"Asian enterprises recognize the value of information technology, but non-discretionary spending is likely to dominate their agendas in 2003."

Within the realm of IT products, spending intentions were most active for storage, servers, networking hardware and software, security products, security services and applications software, according to IDC.