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IT Spending Projections Continue to Slide in SeptemberFRAMINGHAM, Mass. --(Business Wire)-- Findings from the quarterly CIO Magazine Tech Poll(TM) show IT spending projections decreased in July-September with CIOs predicting IT spending increases of 6.5% over the next 12 months, down from 6.9% in April-June. Spending projections in storage systems increased slightly quarter over quarter while spending projections in the remaining categories declined. "Our latest poll suggests that tech spending is likely to remain subdued over the remainder of the year because corporate managers may be concerned about weaker economic growth in 2007," says Dr. Ed Yardeni, Chief Investment Strategist for Oak Associates. "CIOs have a clear vision of how they want to transform their firms," says Gary Beach, Publisher of CIO magazine. "With 30 percent now claiming IT labor is hard to find and keep, the big question is can they build those next generation enterprises." "Storage regained its position as the top spending priority for CIOs. However, future spending expectations for most other categories declined," says Chris Whitmore, Director, IT Hardware Research for Deutsche Bank Securities. "CIOs at very large enterprises were more positive than the past two quarters, suggesting we may see typical seasonal strength among large enterprises exiting the year." The CIO Magazine Tech Poll provides technology and business executives, economists, and policymakers with a tool to gauge technology growth trends to assess the impact on the overall economy. Poll panelists are asked to answer questions on overall current and projected IT budgets on a quarterly basis. Also covered are future spending plans for IT hardware, software, services and Internet initiatives. The results of the July-September poll, conducted from September 7-14th, are detailed below. CIO MAGAZINE TECHNOLOGY GROWTH INDICATORS The CIO Magazine Tech Poll results are used to construct the CIO Magazine Tech Future Growth Index (TFGI), which projects IT activity over the next 12 months(1). In July-September, the TFGI was 2.5, down from 2.9 in April-June. OVERALL IT BUDGET AND COSTS In the July-September Poll, panelists projected IT budgets to grow by 6.5% over the next 12 months, down from 6.9% in the April-June poll. In addition, CIOs report that IT budgets increased by an average of 5.0% over the last 12 months, down from 6.9% last quarter. IT SECTORS When asked about spending across eight specific IT categories, the average number of panelists who plan to increase spending over the next 12 months was 39.7% in July-September, down from 43.1% in April-June. Panelists who plan to decrease spending increased slightly to 13.8% from 12.7% in June. Within the IT spending categories, storage systems was the top spending priority in the current poll with 48.1% of respondents planning to increase spending in this segment (vs. 46.1% in April-June). Computer hardware and security software were tied for the number two spot with 46.9% of respondents planning increased spending (vs. 48.1% and 55.2% respectively in April-June). Computer Hardware: July-September results indicate that 46.9% of panelists plan to increase spending on computer hardware (down from 48.1% in April-June), while 16.3% intend to decrease spending (vs. 14.4% in April-June). Compensation Costs and Labor Market Conditions: IT compensation costs (including salaries, benefits, and bonuses excluding stock options) increased an average of 4.9% in the 12 months ending September, up from 4.8% in June. The supply of labor remained essentially unchanged with 6.2% of the respondents reporting IT labor was 'plentiful' (vs. 6.0% in April-June), 59.0% cited IT labor was 'available' (vs. 64.3% in June) and 31.1% report that IT professionals were 'hard to find' (vs. 25.8% in April-June). Special Questions: This quarter's poll includes two special questions. The first question asked the panelists whether they were concerned about the increased pace of technology vendor mergers and acquisitions. Of the respondents, 59.1% cited they were not concerned as there are too many vendors already in the market, while 40.9% cited they were concerned as it limits the choice of vendors and bargaining power. The second question asked panelists their views on the Software as a Service (SaaS) business model. Almost half (46.0%) responded that they have no intention of moving to that model, while 24.8% and 19.3% cited they will consider implementing the model in 12 to 24 months, and beyond 24 months, respectively. Of the remaining, 6.8% are considering implementing the model within the next 12 months, while 3.1% cited they are currently implementing SaaS for all critical corporate information. CIO MAGAZINE TECH POLL The CIO Magazine Tech Poll was created by CIO magazine in August 2000 in association with well known economist Dr. Ed Yardeni, Chief Investment Strategist, Oak Associates. The poll is proving to be an accurate indicator of technology spending trends. The latest poll opened on Thursday, September 7th, and closed on Thursday, September 14th. An invitation to respond to the poll was distributed via e-mail to a panel of more than 2,000 chief information officers and 3,000 randomly selected CIO readers who match the job function criteria "CIO." Demographics: In the July-September poll, there were 161 responses with very large firms (more than 5000 employees) representing 19% of the respondents and large firms (1,000-5,000 employees) representing almost 25% of the results. A broad cross-section of industries is represented, including finance (16%), state or local government (12%), health care (11%), technology services (9%), retail & wholesale (8%) and non-computer/communications related manufacturing (12%). Complete news release with charts and graphs available at http://www.cio.com/info/releases/100106_techpoll.pdf. The complete July-September CIO Magazine Tech Poll can be found at http://peoplepolls.com/results/CIO/090706.asp?user=CIO. Previous poll results can be found at http://www.cio.com/info/releases. (1) The TFGI is calculated by multiplying the projected growth rate of future IT budgets by the average percentage of respondents saying they plan to increase spending on eight unique categories: computer hardware, data networking equipment, telecom equipment, storage systems, outsourced IT services, infrastructure software, and eBusiness software. |
