IT Spend Report Shows Tougher Times Ahead
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A new survey reports that IT spend is hitting a historic low levels with no glimmer of resurgence coming in the near future. ChangeWave Research said 39 percent of companies polled have spent less than planned in the current fourth quarter, a drop of nine percentage points from an August survey.
Just six percent of enterprises are spending more in the fourth quarter than they planned, a four point decrease since August. Nearly half, 48 percent said IT budgets will be even smaller in the second half of 2009.
The dire tech expenditure analysis reflects macroeconomics that have businesses slashing costs and reducing headcount. ChangeWave said the figures are the worst ever IT spend projections since 2001.
"The numbers are horrific," said Paul Carlton, director of research, in a Web conference today about the survey results.
"The current quarter is at historic lows and there is no indicator that spending will get any better any time soon," he said.
The one stellar aspect is that smartphone sales remain robust and healthy, according to the survey. Research In Motion (NASDAQ: RIMM) is maintaining its market lead, and Apple (NASDAQ: AAPL) is forging inroads into small to medium-sized businesses, according to ChangeWave.
The research firm surveyed 1,926 tech leaders involved with IT spending during this month. The ChangeWave Alliance (parent company of ChangeWave Research), conducts surveys every quarter of its 15,000 members, who are senior technology and business executives in leading companies in select industries.
The November spending analysis exceeded downward projections made by ChangeWave earlier this year. Back in August, the research firm estimated that 29 percent of companies would cut or stop IT spend.
Going into next year, 45 percent of respondents said IT spending will decrease during the first quarter -- which ChangeWave called "unprecedented." The results reflect a drop of 16 points from the August poll. Only 10 percent report that spending will increase in the first quarter.
But tech pursue strings are quite loose when it comes to smartphones, as 35 percent said they will buy smartphones at the beginning of next year, a one percent increase from the August poll.
RIM, while dropping one percent, will benefit the most as 78 percent respondents plan to buy BlackBerry devices. Apple's iPhone is gaining more traction as 22 percent aiming to bring the popular device into their organization -- an increase of five percentage points from the August survey.
According to ChangeWave, RIM's corporate share is heavily concentrated among larger companies, those with over 1,000 employees, while three-quarters of Apple's share is among small-to-medium sized companies, those with less than 1,000 employees.
ChangeWave's results are in tandem with a recent IDC report that showed smartphones showing double digit growth over last year. Device makers shipped 306 million units during the second quarter of the year -- up 5.6 percent from last quarter and a 15.3 percent increase from the second quarter of 2007.