Business IT Spending Stabilizing

By Paul Carton and Jean Crumrine

Last quarter we saw a leveling off in the rate of decline for business IT spending. But ChangeWave’s latest survey shows U.S. corporate IT spending in the process of rapidly stabilizing – with a dramatically improved outlook now in place for the third quarter.

The ChangeWave survey was conducted May 11-20, and a total of 1,849 respondents involved with IT spending in their organization participated.

Dramatic Improvement. Twenty-four percent of respondents said their company’s IT spending will decrease, or there will be no spending at all for the third quarter, but that’s a major 17-point improvement since our previous survey in February.

Another 15% said their company's IT spending will increase – 5-points improved and, most importantly, the first recorded uptick in a ChangeWave survey in two and one-half years.



We also askedrespondents if their IT spending was on track thus far in the second quarter, and the results show smaller but unmistakable signs of improvement.

One-in-ten respondents (11%) said they’ve spent “More than Planned” so far in the second quarter – 4-points better than our February survey. And while 33% said they’ve spent “Less than Planned” – that’s still a 5-point improvement from previously.



The Biggest IT Winners – Corporate PCs, Servers and Smart Phones

There are signs of momentum in corporate purchasing of PCs, Servers and Smart Phones.

Of the 13 IT categories looked at in this survey, PCs (Change in Net Difference Score = +6) and Servers (+5) registered the biggest increase by far since the previous quarter.

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In the same survey, we also focused on corporate smart phone buying and found a resurgence set to occur in the coming quarter. A total of thirty-six percent of respondents report their company plans to buy smart phones in the 3rd Quarter – a 3-point increase from previously.



In terms of manufacturers, Research In Motion (RIMM; 75%) is maintaining its dominant share of corporate planned purchases going forward, but we note that it’s down 2-points since February.

Number two Apple (APPL; 26%; up 4-pts) continues to show surprising momentum in the corporate market – up 4-points to 26%.



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).

Bottom Line: ChangeWave's latest survey shows U.S. corporate IT spending in the process of rapidly stabilizing – with a dramatically improved outlook now in place for third quarter 2009.

All told, several bullish indicators – including the first recorded uptick in planned IT spending in two and one-half years – signal the U.S. business recession could be over before 2009 comes to a close.

Along with Apple and Research In Motion, other companies showing momentum in our latest survey include Cisco (CSCO; +4), VMware (VMW; +4), Microsoft (MSFT; +3) and Oracle (ORCL; +1).

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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