The annual NCC Benchmark of IT Spending survey of 168 of end-user organisations in the UK found that over half expect IT spend to increase over the next year by an average of 1.9 per cent.
That figure varies widely over different sectors and in central government, manufacturing and finance, overall IT spend is predicted to actually fall over the next year.
Ian Jones, head of content and publishing at NCC described the outlook of IT buyers as "cautiously optimistic".
The bulk of IT budgets is still taken up by running and maintaining the existing infrastructure, with operational costs making up 68 per cent of total spend. Fresh investment in IT only accounts for 28 per cent, with the rest accounted for by end-users and other sources within the organisation.
Again the figures differ in each sector with IT investment greater in central government and finance and lower in construction and manufacturing.
IT staff remain the single largest budget item, accounting for almost a third of overall budgets. The average level of IT staffing is 26.5 techies per 1,000 end-users in a company, which is slightly down from 31 last year. The finance sector has the highest ratio at over twice this year's average.
Desktop replacement is the most important IT department activity and 42 per cent of Windows systems are expected to be upgraded over the next two years, mainly to Windows XP.
The proportion of sites running Linux desktops remains low although strong growth is predicted. Jones said the Linux vendors had come in for "a real kicking" after all the rhetoric and hype about open source on the desktop.
"It has really made no impact whatsoever on the desktop. The Linux vendors need to raise their game," he said.
The big area highlighted by user organisations is thin client desktops. These are currently only used in 16 per cent of firms but that is expected to rise to 24 per cent over the next two years.
Laptops and PDAs are also expected to grow proportionately much faster than desktops at just over 50 per cent over two years, although the actual numbers remain a lot smaller.
The Windows 2003 server upgrade is also a major project on the table for many companies while the decline of the mainframe continues apace. The number of respondents using a mainframe architecture fell from 69 per cent last year to 59 per cent this year.
