IDC warns European enterprises against investment conservatism

Web-based applications and business intelligence are among the top priorities for enterprise IT spending in 2006, according to new research from analyst firm IDC.

The survey of 300 large enterprises in the US, Western Europe, China and India indicated that security remains the overall top priority in IT spending, but the data also suggested a shift in spending patterns.

Enterprises have focused on infrastructure management and optimisation in the past three years, but investments in this segment are decreasing for the first time.

The study indicated that European IT managers are conservative in their IT spending, focusing on 'good enough computing' rather than using IT as way to build a strategic lead over the competition.

IDC warned that this conservatism might cause the region to fall behind the US.

"There is a danger that European firms are struggling to compete with strategic innovation from the US on the one hand, and low-cost competition from Asia on the other," said Stephen Minton, vice president of worldwide IT markets at IDC.

The strategic view of IT is more prevalent in the US, where firms are looking at computers to allow for real-time business performance monitoring, better management of customer relationships, and enhanced collaboration.