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Slower Going for IT Spending – But the Recovery Continues


Last quarter we saw corporate IT spending in the process of rapidly stabilizing. Our latest ChangeWave survey shows the rate of recovery is slower this quarter — but on the positive side things are still continuing to improve and there are signs of a bigger uptick in store for 1st Half 2010.

The ChangeWave survey was conducted August 10–19, and 1,801 respondents involved with IT spending in their organization participated.

Looking ahead, 18% of respondents said their company’s IT spending will increase for the fourth quarter — a three-point improvement since our May survey.

However, one-in-four respondents (25%) said that their company’s IT spending will decrease (or there will be no spending at all) — which is one point worse than previously.

Project IT Spending for Next Quarter

We also asked respondents if their IT spending was on track thus far in the third quarter, and our findings show only a very slight change since the previous survey.

Thirty-two percent said they’ve spent Less than Planned so far in the third quarter, and 11% say they’ve spent More than Planned — altogether a net one point improvement.

IT Spending Thus Far in Current Quarter

1st Half 2010

On a more positive note, when we look ahead to first half 2010, we see more bullish signs. One-in-four (24%) said they think their company’s first half 2010 budget will be greater than second half 2009, a 4-point improvement since the previous survey.

Looking Ahead – First Half 2010

Only 19% said they think their company’s IT budget will be less than second half 2009 — also 4-points improved. We note that this is the most optimistic longer-term outlook we’ve seen in two years.

Individual IT Categories

Out of the 13 IT categories we looked at in this survey, Networking (Change in Net Difference Score = +3) registered the biggest increase since the previous quarter. Application Development Software/Tools (+2) and Storage (+1) are also showing some signs of momentum.

In the same survey we also focused on corporate smart phone buying. Going forward, 35% of respondents report their company plans to buy smart phones next quarter — down 1-point from previously.

In terms of manufacturers, Research in Motion (RIMM; 74%) is set to maintain its dominant share of planned corporate buying.

Future Smart Phone Buyers

Apple (AAPL; 27%) remains in second place, up 1-point from previously.

Of course, most of Apple’s corporate share is among small- to medium-sized companies (under 1,000 Employees), while RIM’s corporate share is heavily concentrated among larger companies (over 1,000 Employees).

Palm (PALM; 7%) is also registering a 1-pt uptick in planned purchases — likely attributable to its recent launch of the Palm Pre.

Bottom Line

Nearly all signs point to a slowdown in the rate of recovery for corporate IT spending this quarter. But on the positive side, spending is still continuing to improve and there are signs of a bigger uptick in store for first half 2010.

In terms of specific vendors, Microsoft (MSFT; +2) and Dell (DELL; +2) are showing signs of momentum going forward — possibly related to the impending release of Windows 7.

Jean Crumrine co-wrote this article.

Article printed from InvestorPlace Media,

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