Enterprise IT Spending Outlook Grim Near Term

Thirty percent of enterprises cut IT spending and only 12 percent spent more than planned in the third quarter, according to the latest ChangeWave Research survey of nearly 1,500 respondents involved with IT spending in August.

For the fourth quarter, 29 percent say their companies will cut or stop IT spending and 13 percent say their companies will spend more. Also, 61 percent of respondents said their company is not willing to spend money on IT products and services, while 34 percent are willing to stick with their normal spending patterns.

“It’s a bleak picture,” Andy Golub, associate director of research at ChangeWave Research, told InternetNews.com. “There doesn’t seem to be any immediate catalyst on the near horizon that will lift spending.’

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.

However, another analyst firm, Gartner, had a more upbeat assessment. A recent Gartner report said that worldwide software spending will grow more than 10 percent in 2008, followed by IT services at 9.4 percent.

ChangeWave reported that 35 percent of respondents said high energy costs were impacting their company’s IT spending plans for the second half of the year, and 25 percent said the presidential elections are having an effect.

The impact of high energy costs has pushed vendors to tout green computing solutions, which save energy. Even data center construction has gone green.

ChangeWave found that things are not going to improve any time soon — 39 percent of respondents said IT spending would not pick up in their company until at least the second quarter of 2009. “The credit crunch appears to be worse than people think,” ChangeWave’s Golub said “We released another report this week on overall corporate health and it mirrors these results.”

There is one bright spot in the news, however, and that is that the iPhone is gaining ground, or at least interest, in the corporate market. A year ago, 10 percent of the respondents said they’d buy an iPhone, and now the percentage has grown to 17 percent.

The iPhone’s halo effect

The iPhone’s popularity is having an effect on sales of the Mac to the enterprise as well. Despite well publicized consumer dissatisfaction with the iPhone 3G, 19 percent of respondents said the 3G iPhone has made their company more likely to purchase Apple products in the future, while only one percent said it has made their company less likely to do so.

“Because of the tough economic times, PC purchasing is down overall, but, when we asked IT managers what percentage of employees currently use Apple and what percentage would like to do so, they said that about six percent currently use Apple and about 18 percent want to do so,” Golub said.

“That points to a lot of growth opportunity for Apple in the enterprise market,” Golub added. “There does seem to be a slight halo effect from the iPhone.”

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