Cost-cutting is top of the agenda for the next quarter, according to the latest study of US CIOs by Morgan Stanley.
But it's not all doom and gloom. The majority of CIOs are continuing with their projects and most of them state that their budgets for new technology have yet to be slashed.
CIOs of US leading companies seem to be saying that they are keeping the purse strings pulled tight next quarter. Fifty four per cent of them said that they would not be spending more money on technology through the second half of the year than they did in the first. A further 61 per cent of the CIOs gave more bad news for the tech industry. Sixty three per cent said that they were actively looking to reduce the number of software vendors that they work with. That means more competition and that means more discounts - something the tech industry can ill afford.
However, the majority of those asked, 33 per cent, said that they had not reduced their budgets in light of the current economic conditions and the recent turmoil of the stock market. And only 15 per cent reported that they had cancelled networking projects. So it's not all bad.
And there's more good news - if only for Microsoft. Of all of the CIOs surveyed, 27.6 per cent said that they would be increasing their spending on Windows 2000 upgrades through the next half of the year.
It seems that most of the money being spent through the second half of 2001 will be going on Windows desktops and networks. Although 26 per cent of CIOs said that they would be spending on e-commerce initiatives, putting it at number three in the list of top spends, the rest of the top six were Windows desktop-related.
That's good news for Microsoft, but not exactly encouraging for the companies which have to maintain these services.
There is some confusion however. It may be true that Windows maintenance and upgrades seem to be getting the lion's share of cash spend over the next six months, but 56 per cent of CIOs say that cost is the main area where NT excels in their organisation. So perhaps they aren't spending much on the upgrades.