February 29th, 2008

Survey: CIOs moderately upbeat about IT spending

Posted by Larry Dignan @ 6:37 am

Categories: Datacenter, Dell, General, Hardware Infrastructure, Hewlett-Packard, IBM, IT Management, Storage, Sun

Tags: CIO, Dell Computer Corp., Hewlett-Packard Co., Virtualization, PC, IT-spending, Survey, UBS AG, Marketing Research, Servers

Cisco, Dell and others have seen lumpy customer demand, but the folks that are producing those volatile sales patterns–CIOs–are moderately optimistic and expect solid technology spending in 2008, according to a survey by UBS.

In its survey, UBS noted that:

Our CIO survey–completed in February–points toward surprisingly solid IT spending growth in ‘08. While we remain cautious on IT spending, the survey suggests that the spending environment may not be as dire as many think, and supports the optimistic outlooks of HP, EMC, Sun & IBM.

In other words, technology spending may not be so doom or gloom after all.

Among the high-level takeaways:

• Among the 100 CIOs surveyed by UBS, 45 percent of respondents expected their IT spending to grow in the first half of 2008 with 14 percent seeing a decline. And 46 percent saw their IT spending increasing in 2008 with 12 percent spotting a decline.

• PCs are going to take the brunt of budget cuts. UBS found that notebook demand should be solid, but desktop purchase will be put off. The UBS survey found that Dell’s PCs were the “most sensitive to the economy.” That explains Dell’s fourth quarter results, which disappointed many analysts.

• Servers are the biggest spending priority for 2008 and HP is leading the field. Virtualization is driving blade server purchases and storage demand. Twenty seven percent of CIOs said their server budgets would increase.

• U.S. CIOs are more optimistic with 52 percent of respondents expecting a budget increase. CIOs in the UK are pessimistic with only 21 percent of respondents expecting budgets to increase.

• HP is becoming the vendor of choice for CIOs in servers, desktops, notebooks and printers. Purchase intentions for Dell weakened. CIOs also said Dell has resorted to cutting prices over the last six months and has been most aggressive in grabbing market share.

• Vista isn’t driving demand. Among the CIOs surveyed, 63 percent are not expecting Vista to boost purchases. UBS reckons that Vista SP1 may tilt that percentage more toward Microsoft’s favor. This chart tells the tale: