Hard Facts: July 29, 2002

Some decline in spending priorities is to be expected, given that the summer months are generally a slow period for technology spending. But the size and scope of the decline is disconcerting, indicating that large corporations,in the face of continued economic uncertainty, ongoing accounting scandals and an increasingly volatile stock market,remain hesitant to make significant new investments in technology.

These results contrast sharply with recent survey data for small businesses, which shows the level of spending priority is increasing in many hardware/software and Internet-related categories.

But small businesses alone can't make up for the lack of growth in large-company spending. As a result, chances for a strong, sustained recovery in technology spending anytime this year are fading.