Business Tech Spending Picks Up
After delaying technology purchases and upgrades during the downturn, businesses started spending strongly again in the fourth quarter, lifting profits at tech suppliers including EMC Corp., SAP AG, International Business Machines Corp., and Xerox Corp.
Companies are signaling they’re more comfortable spending money on technology now that sales and profits are expanding. “What drives tech spending are profits,” said Bill Whyman, head of tech strategy research at equity research broker dealer ISI Group Inc. Corporate profits have been surging the last few quarters and spending usually lags profits by three quarters, he said.
World-wide information technology spending is forecast to increase 5.1% to $3.6 trillion this year, according to market research firm Gartner Inc.
