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Executive Summary: Amidst the current economic climate, any signs of a turnaround are more than welcome. The results of Windows IT Pro's 2009 independent survey indicate things are looking up. |
Although the IT industry is awash with evidence that budgets are tight, recent survey results indicate that our audience is faring better than expected in terms of IT spending on products, services, and IT staffing. Each year, Windows IT Pro commissions an independent survey of its print, email, and web audience, which represents organizations with an average of approximately 5,900 employees and $3.2 billion in revenue (with a median of about $27.4 million in revenue) across a range of industries. The results buck some industry predictions and point to some interesting shifts in the proportion of Windows and non-Windows systems.
In July, Gartner revised its forecast of IT spending in 2009 downward from $3.4 trillion to $3.2 trillion, a 6 percent decline—significantly steeper than the 3.8 percent decline the analyst firm predicted in March 2009. But according to data collected in summer 2009, IT organizations in our audience are spending slightly more on most categories of software, hardware, and services. The anticipated average annual expenditure for computer software increased slightly, from $1.77 million in 2008 to $2.58 million in 2009. Respondents stated that spending on computer systems will increase from $2.81 million in 2008 to $3.39 million in 2009. Spending on storage and peripherals is expected to remain flat for 2009, at an average of $2.44 million. Security and business continuity expenditures are expected to increase only slightly, from an average of $1.93 million in 2008 to $1.98 million in 2009. The only drop in spending predicted is in the category of networking and telecommunications, from an average of $3.06 million in 2008 to $2.44 million in 2009. Figure 1 shows these results in a chart.
Within the category of computer systems spending, organizations in our audience are planning to purchase significantly more Windows workstations and servers for new deployments and upgrades in the next 12 months than they were at this time in 2008. Respondents indicated that they are planning to add an average of 683.9 servers in 2009, up from 309.2 in 2008—a dramatic increase driven for the most part by Windows Server 2008 deployments. Linux additions are increasing as well, with respondents indicating that they plan to purchase an average of 11.2 Linux servers or workstations within the next 12 months, an increase from 9.6 at this time last year. The number of UNIX and Mac servers or workstations that organizations plan to purchase within the next 12 months is dropping, representing an ever-smaller role in our audience’s organizations.
The increase in the purchase of Linux servers is a trend that has been in motion for the past few years among our audience, with 41 percent of respondents indicating that Linux servers were currently in use in 2009, essentially flat with 2008. Among our audience, Windows Server 2008 has stolen a bit of the thunder from Linux, but even so, 19 percent of our audience indicated that they plan to purchase new Linux servers before 2010.
The best news coming out of our survey is that IT spending on both outsourcing or consulting and staffing will increase in 2009 over 2008—perhaps in part to handle the upcoming Windows Server 2008 R2 and Windows 7 deployments. A whopping 66 percent of our audience has deployed or plans to deploy Windows Server 2008 before the end of 2010, and 66 percent have deployed or plan to deploy Windows 7 before the end of 2010. IT expenditures on consulting and outsourcing among our audience are expected to increase from an average of $2.04 million in 2008 to an average of $3.57 million in 2009.
Keep in mind that these figures represent averages among a huge range of companies. We have some very large companies represented in our audience (those with more than $25 billion in revenue, for example), so those companies tend to skew the spending averages. But even so, the year-over-year trend is not as dismal as we might have expected.
For small to medium-sized businesses (SMBs) that have fewer resources at their disposal, a focus on judicious software and hardware spending can help IT organizations save money in the long run by helping workers increase their productivity. Michael Risse, former vice president of the Worldwide Small and Midmarket Business Group at Microsoft, commented in an interview earlier this year that SMBs typically spend first in core infrastructure—to ensure security and reliability—and second in employee productivity. Risse believes that strategic software spending is critical to helping businesses save money.
The huge wave of product releases coming up from Microsoft this fall will certainly help spur spending, as indicated by our survey results. The light can’t come fast enough in this economic tunnel. For our audience, at least, it seems things are no longer pitch black. It's a start.
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