KnowledgeStorm Survey of US Business Technology Professionals Shows Corporate IT Spending to Increase by 3.8% in 2005

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Special report sheds a light on the controversial issue of offshore outsourcing and takes a look at IT spending trends for 2004 and predictions for 2005.

KnowledgeStorm, the Internet’s top-ranked technology search site, today released a new report on “2005 IT Spending & Offshore Outsourcing.” The study, based on surveys of business technology professionals, reveals that IT budgets are expected to increase by 3.8 percent in 2005. The top spending priorities for IT departments in 2005 are data security & integrity, project management, and business intelligence. In addition, KnowledgeStorm’s study finds that offshore outsourcing is widely prevalent and continues to make inroads in corporate America.

“Despite intense controversy, offshore outsourcing is becoming ‘standard operating procedure’ for many American businesses,” said Raj Gajwani, KnowledgeStorm’s Director of Market Intelligence. “However the limited range of functions being outsourced, combined with increasing IT budgets, indicates that popular fears over offshore outsourcing may have been overblown.”

Key findings from the “2005 IT Spending & Offshore Outsourcing” report include:

•    US companies plan to increase IT spending by 3.8% in 2005.

•    Almost one out of every two companies surveyed cites data security as a top priority.

•    Overall, the top priorities for corporate IT spending in 2005 are:

1.    Data Security and Integrity (45%)

2.    Project Management (37%)

3.    Business Intelligence (36%)

•    More than 28% of US companies report using offshore outsourcing in 2004 – a slight increase from last year.

•    Large companies are by far the heaviest users of offshore services, but nearly one out of five small companies relies on offshore services too.

•    India is by far the biggest destination for offshore outsourcing of services. Competitors such as China and Russia are rounding errors by comparison.

•    Corporate functions being sent overseas are largely limited to the “big 4” IT-related functions:

•    Satisfaction levels that hover around 70% indicate that companies have worked through the difficulties posed by overseas sourcing. In addition, over 90% of companies surveyed indicate that they will maintain or increase their level of offshore outsourcing in 2005.

The report “2005 IT Spending & Offshore Outsourcing” contains additional detailed findings from KnowledgeStorm’s December 2004 survey of business technology professionals. This study is part of KnowledgeStorm’s ongoing market research into enterprise technology, which is enabled by the Internet’s most useful business technology search site at http://www.KnowledgeStorm.com. This market research report is available to the public at no charge at http://www.knowledgestorm.com/research.html.

About KnowledgeStorm

Founded in 1998, KnowledgeStorm is the Internet’s top-ranked technology search site. With the largest online index of IT solutions, KnowledgeStorm offers technology buyers a free, easy and comprehensive means to match business requirements to a "short list" of technology providers and to stay current on technology topics and trends. This information is available through the KnowledgeStorm Network, which includes http://www.knowledgestorm.com, specialty search sites and syndication partners. Technology vendors use KnowledgeStorm’s efficient, effective lead generation services to fill sales pipelines with motivated and educated buyers. For more information, visit http://www.knowledgestorm.com.

KnowledgeStorm and the KnowledgeStorm logo are trademarks of KnowledgeStorm, Inc.

Media Contacts:

Laurie Hood    

KnowledgeStorm

(770) 290-8807

Laurie.Hood@KnowledgeStorm.com

Tara Biller                    

KnowledgeStorm, Inc.                            

(561) 504-3893                                

Tara.Biller@KnowledgeStorm.com     

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