CIO Survey
Tentative Signs of
Stabilization in IT Spending
2009 IT spending growth expectations have
stabilized, but negative bias on revisions remains.
Results from our recent survey of 150 IT executives
indicated tentative signs of stabilization, as expectations
for 2009 IT budget growth improved by 70 bps to -2.8%
YoY, after a 580 bps drop in our Dec. survey. Software
polled as the most resilient sector, with expectations of
-0.8% growth in CY09, up from -2.1% in April — which
compares favorably to our -1.6% weighted average
growth expectation for the group. Expectations for
Hardware growth remained relatively stable at -1.6%,
which is significant better than our -8.6% growth forecast.
However, CIOs still show little confidence in the
sustainability of ‘09 budgets, with >40% stating further
downward revisions. Lastly, SMB spending expectations
remain more constructive than enterprise.
Key Segment Takeaways
Software:
• ARST, FIRE, MFE, and VMW appear well
positioned to benefit from relatively strong Security,
Compliance, and Virtualization demand. ADBE saw
the biggest net improvement in expected spend,
while RHT saw the biggest net decline.
• CIOs expect the SUN/ORCL deal to accelerate
spending on Apps, DB, and Storage with ORCL.
• Respondents expecting to upgrade to Windows 7 in
2010 remained >40%--a positive for MSFT.
Hardware:
• 2H09 could show early signs of recovery, with
storage leading the way as 40% of CIOs look for an
uptick before year-end 2009. Importantly, 40% of
CIOs also expect to refresh PCs in 2010, well above
normal levels of 25-30%.
• DELL and HPQ are best positioned to benefit from a
2010 server and PC refresh, with DELL showing the
most promise for market share gains.