Signs of Improved Spending Environment

By Paul Carton and Jean Crumrine

After a two-year downward spiral, ChangeWave’s latest corporate software spending survey is picking up unmistakable signs of an improved spending environment going forward.

While overall spending is still contracting, the 90-day outlook points to a dramatic lessening in the rate of decline – a critically important indicator that suggests business software spending could be coming out of recession sooner than expected.

The ChangeWave survey of 1,775 respondents involved with software purchasing in their company was conducted April 16-27, 2009.

Improved Software Spending Going Forward

Better than one-in-ten software buyers (11%) say their company will spend more on software over the next 90 days – 2-pts better than our January survey. And while 26% still say their company will spend less – that’s a huge 13-pt improvement over previously.



There were other promising signs of improvement in terms of corporate capital budgets.

While 36% said their company’s cap budget had been adjusted lower over the past 90 days, that’s a 10-pt improvement just since January. A total of 6% say their cap budget has actually increased – 1-pt better than previously.

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Leading Software Categories

A key focus of this survey is on corporate spending increases and decreases within specific software categories.

Similar to our overall findings, corporate spending still remains negative in all but one of the software categories we looked at – but the rate of contraction has slowed dramatically.

Here's a look at one of the big winners in our current survey, Data Storage (Net Score = 0), where spending has stabilized going forward. A total of 14% of companies are increasing their spending on data storage over the next 90 days while 14% are decreasing their spending – an 11-pt net improvement over the previous survey.



A second category on the verge of turning positive is Virtualization software (-1).



A total of 14% of respondents say their company is increasing Virtualization Software spending going forward while only 15% say it is decreasing – a net 11-pt improvement from previously.

Other software categories that – while still negative – have shown the biggest improvements since the previous survey include Business Intelligence/Reporting and Analytics (-5; up 16-pts) and Customer Relationship Management (-5; up 14-pts).

Reasons Behind the Improvement

We asked our software buyers to tell us the key reasoning behind their software spending plans for the next 90 days. Three stand out:

While 22% still cite a general slowdown in business conditions and capital budgets as the factor most driving their purchasing decisions – that’s 2-pts improved from previously.

Similarly, while 27% still say their company currently doesn’t need to purchase any new software – that’s also 2-pts improved from previously. 

In another positive sign, 6% of corporate respondents now say a general improvement in business conditions and capital budgets is driving their software purchasing decisions – 2-pts better than in January.

Bottom Line

Our latest corporate software survey has picked up substantial signs of an improved spending environment going forward. While overall spending is still contracting, the 90-day outlook points to a dramatic lessening in the rate of decline – a critically important indicator that suggests business software spending could be coming out of recession sooner than expected.

Click here to check out more of the latest ChangeWave research findings.

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The ChangeWave Alliance Research Network is a group of 20,000 highly qualified business, technology and medical professionals -- as well as early adopter consumers -- who work in leading companies of select industries. ChangeWave surveys its network members weekly on a range of business and consumer topics, and converts the information into a series of proprietary quantitative and qualitative reports.

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