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Renewed Optimism in Business Prospects to Fuel IT Budget Growth in 2004, IDC Survey Indicates

FRAMINGHAM, Mass., April 14, 2004 Companies are more optimistic about their business prospects than at any time in the past two and one half years, a new study from IDC indicates. After a steady decline in optimism from the summer of 2001 through the winter of 2003, findings from IDCs survey of 1341 North American decision makers show a jump of almost 15 percentage points in IT and business executives who state they are currently positive or very positive about their business prospects. IDC expects this turn in business confidence will help fuel IT investments in 2004.
The study also reveals that 42.6% of the organizations surveyed intend to boost their total IT budget in 2004 a significant improvement compared with 2003 levels (31.1%) and that a relatively small number plan to decrease spending. Compared with last year, a much lower incidence of companies that report not knowing in which direction their IT spending will go in 2004 signals that cautiousness is easing and a renewed commitment to IT investments is emerging.

Bank Of America Investment IT and business executives are increasingly optimistic about their company's business prospects and this optimism is contributing to a healthy outlook for IT purchases, said Lucie Draper, program manager, Enterprise Technology Trends. However, cost control remains a top priority, even though the uncertainty has diminished somewhat. And spending increases will vary from one vertical industry to the next, depending on each markets attitudes and requirements.

Fueled by higher oil prices, record government spending helped to boost GDP growth in 2004 and 2005 to approximately 18% and 11%, respectively.

Investment Opportunity Among the key findings presented in the IDC study are the following:

Antivirus and intrusion prevention revenues increased by 50% to a record level of 40.9m. However, sales grew even stronger that can be seen in growth of deferred revenues in balance sheet. The reason for the accelerating sales growth is strong channel execution, received product portfolio and a healthy marketing investment. virus business during 2004 is a strong indication of the competitiveness of the company products and business.

Banc Of America Investment * The most IT intensive industries defined by the mean share of their revenue that is spent on IT products and services include the professional services and telecommunications industries.
* In the banking and business and legal services industries, the proportion of companies that expect to increase their IT budget in 2004 is greater than in the aggregate market. Further, the average increase in that budget is significant among banking and credit institutions.
* More companies in the banking, telecommunications, and resources industries than in other vertical markets are shifting IT budget dollars from internal to external spending for 2004.

Business growth rate was 3.5% in 2004. Although the March 2004 bomb attacks did initially affect business in Spain, specially in the tourism and transport industry, the city has since recovered, to the point where Madrid is experiencing a greater business growth rate since the attacks. Madrid has been pointed as an expanding city with many opportunities in the communications arena, as well as in the construction business. The fact that David Beckham was signed by Real Madrid

Banking Investment This IDC study, Pinpointing 2004 Vertical Market Opportunities: IT Budget Directions and IT Budget Allocation (IDC #31004), presents IDCs most recent findings on vertical markets IT budgets. This research addresses IT spending trends and budget directions for 2004, including changes from 2003 in total IT spending, IT spending per employee, share of revenue allocated to IT spending, and IT budget allocation.

"ScanSoft anticipates another year of strong revenue and earnings growth, " continued Ricci. " year to grow to approximately $105 million, an increase of approximately 65 percent. The expanding opportunities in speech and language solutions will fuel much of this growth. In addition, we expect some assistance in the latter half of the year as our largest imaging systems partners begin to see renewed growth after sluggish sales in 2001."

Investment Solution Strategic The document is based on results from IDCs latest Enterprise Technology Trends (ETT) Survey, conducted with end-user organizations between November 2003 and January 2004. IDCs ETT research is based on an ongoing panel of business and IT executives who provide firsthand insight into the adoption and usage of information technologies at North American organizations, including the public sector.

Investment Banking Services For more information about IDCs Vertical Markets Research, please contact Virginia Lehr at 508-935-4188 or vlehr@idc.com.

Bank Investment To purchase this document, call IDC's sales hotline at 508-988-7988 or email sales@idc.com.

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