How to spend your IT budget

IT directors should prioritise desktop refreshes, offshore outsourcing and IP virtual private networks, according to analyst Gartner's annual assessment of what the most vital technologies for businesses are.

Gartner has split various technologies into those that should be looked at immediately, those that should be evaluated over the next year and those that will not deliver a tangible return on investment before 2007.

Businesses should look at doing desktop upgrades with Europe a buyers' market for hardware and software because of capacity and favourable exchange rates, according to a panel of analysts at the Gartner Symposium in Cannes.

Companies investing in new wide area networks are advised to migrate to IP VPN technologies instead of frame, ATM and leased lines because of increased network flexibility and potential WAN total cost of ownership savings of around 30 per cent.

The "Cisco premium" for enterprise network equipment is now rising to the point where companies should start to look at best of breed buying to get savings of 20 per cent, the analyst house said.

Server and storage virtualisation, 802.11 wireless LANs, disaster recover and security audits – because of the raft of new regulations and laws - are also marked as high priority for CIOs in the next 12 months.

Technology areas that are likely to mature in the next three years are Linux on the desktop – although Gartner says the long-term impact depends on whether Microsoft cuts the price of Windows and Office – Itanium in the middle and back-office and web services.

Steve Prentice, chief of research at Gartner, said in a statement: "By 2004, web services will represent the dominant mode of deployment for new application solutions for Fortune 2000 companies. Advanced, secure web services will be a reality by 2005."

And those technologies that will not be ready for another five years include 3G, RFID, commercial grid computing applications, 64bit on the desktop and 'on demand' computing - where "marketing hype is way ahead of delivery".

Prentice said: "IT managers should also be evaluating and preparing to adopt web services, PC virtualisation and wireless services in the next three years. However, there is a lot of hype surrounding ‘On Demand’ computing, 3G, 64 bit computing, grids and artificial intelligence, which we believe enterprises should hold off until at least 2008."