Despite increasingly significant investments in IT security, automation, and Web applications, Forrester Research expects European corporate IT spending to increase only 1.6% in 2006 compared to 2.9% last year, with only 21% slated for new investments compared to 28% the previous year! Spurred by financial imperatives like achieving business objectives and reducing operating costs, half the European companies surveyed by Forrester listed cutting their IT spending as a high or even critical priority. One-quarter of them plan to reduce these costs in 2006.

Forrester expects French companies to increase their spending by only 0.4%, while spending should increase by 3.4% in the United Kingdom and 2.3% in Germany. In France, only 17% of funds allocated to IT are expected to be put toward new investments, while 83% will go to maintenance and support. In the United Kingdom, investments are expected to equal 20% of spending.

For all companies participating in the study, security remains a primary IT focus and most spending is thus expected to go toward software like antivirus and firewall programs, and toward task automation. Moreover, Forrester believes that these companies are likely to choose big industry names over smaller vendors. Of companies surveyed, 60% nonetheless expect 2006 to be a good year for their business.