Steven Matheys, chief information officer of Schneider National, is a technology maker's dream.
Schneider National, a trucking company based in the US, is planning to buy new hardware and customer relationship management software with an information technology budget that is up about 25 percent this year. Although that spending level is roughly the same as it was in 2001, any increase at all is considered huge in this stagnant economy.
"If you read the tea leaves it looks like things will pick up, but the budgets are tight," said Matheys, whose company has US$2.4 billion in annual revenue. However, he added: "It's a year of cautious optimism".
That thinking will translate into some welcome spending by the technology officers of Corporate America for the first time in what seems like an eternity. Yet the boom days have by no means returned: In this conservative era, companies are looking to buy only those products that will either save money or are deemed essential for growth in years to come--in other words, the closest thing to a sure bet for return on investment somewhere down the line.
The buzzwords of the dot-com boom have given way to mundane-sounding technologies such as network-attached storage, which can save money and make systems more flexible, and application servers that can ease development and complexity.
High on the wish lists of many customers is "application integration" products that can bring together disparate technologies that were purchased in headier, if not reckless, times.
"We're not going to be in the total can't-spend-a-dime mode like we were in 2002," said Jay Williams, chief technology officer, The Concours Group, a services firm. "Even those that are trying to put off spending will spend a little more to maintain infrastructure."
Still, even where these sensible products are concerned, spending levels will be tied to volatile economic factors such as a war with Iraq, corporate scandals and stock market turbulence. Forrester Research estimates that a 4.5 percent surge in gross domestic product will be needed to boost tech spending, a rate that the GDP isn't expected to approach in 2003.
No longer viewed as an optional luxury, technology represents more than a third of business capital spending, up from about 20 percent in 1980, according to Economy.com. That fact means tech spending will eventually mirror other cyclical parts of the economy, which explains why IT budgets are monitored as fiscal barometers well beyond the industry itself.
According to interviews by CNET News.com with chief information and technology officers, here are some of the technologies likely to top their shopping lists in the next 12 months:
Application integration
Technology officers are swimming in software packages that were supposed to revolutionize the business but fell short. To make matters worse, all of these alleged "best of breed" applications are bred not to work together.
Enter the applications integration players, many of whom fly under the radar, such as Webmethods, Vitria and SeeBeyond. Their goal is to cut the number of applications and make the remaining technologies work better together.
In addition, companies are looking to Web services to help them with integration, but they are being careful not to buy into the hype that has surrounded this technology. Technology officers said they are looking not only to integrate applications internally, but also to work with partners, suppliers and customers.
The appeal of applications integration is changing the game for the software industry as a whole because customers are not willing to launch costly projects for customer relationship management (CRM) or enterprise resource planning (ERP) until they reduce the number of applications and integrate systems better.
Two large companies, Krispy Kreme and furniture maker Steelcase, are planning CRM and ERP projects respectively, but the goal is to cut the number of applications, simplify and ditch systems dating back to the 1960s.
Krispy Kreme CIO Frank Hood said the company is looking for an ERP system that will help it manage its sprawling business, which manufactures everything from the machines used to make its doughnuts to the batter used at franchises. "We need a more robust system," Hood said.
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