Information technology organisations are undergoing a metamorphosis, moving away from traditional IT areas, spending less money and relying more on the Internet, according to the latest update of an annual report from market researcher Meta Group.
Global spending on traditional IT areas such as development and maintenance work is down 33 per cent, while outsourcing of development, maintenance, networks, help desks, the data centre and business processes jumped 42 per cent in 1998 compared to the previous year, Meta found.
At the same time, spending on the Internet rose and is now at nearly the same level as traditional software development and maintenance. Of the 426 organisations surveyed in 21 areas of the private and public sector in more than 12 countries, Meta discovered that nearly 28 per cent of IT spending is related to the Internet, intranets, networks and supporting hardware.
Traditional software development and maintenance spending for 1998 was at 31.4 per cent and data centre expenditures were just 8.5 per cent.
The rate of increase in IT spending as a percentage of gross revenue has slowed, with expenditures hitting 7.1 per cent of gross revenue in 1998, compared to 6.9 per cent in 1997 and 5.1 per cent in 1996.
More is being demanded of IT professional as budgets drop. The average IT worker in 1995 had to support 38 non-IT staff members. That figure jumped to 52 last year, Meta said.
Consistent with other researchers, Meta found that year 2000 issues are the top concern of IT departments, followed by a desire to improve the quality of systems and services, the need to decrease costs and the goal of updating the technology infrastructure.