Business Confidence in IT Spending Grows: Report

By Nathan Eddy  |  Print this article Print

The signs of spending optimism seen in the fourth quarter of 2010 are continuing, according to a CDW report.

Overall confidence in economic growth is beginning to translate into anticipated spending in the IT marketplace, according to the latest CDW IT Monitor. The report found IT decision-makers are confident in continued investment in hardware and software with an upward trend among medium and large businesses over the last six months.

The company’s research found 90 percent of IT decision-makers at large-size businesses and 89 percent at medium-size businesses expect to purchase new hardware in the next six months. This is up three and nine percentage points among large and medium-size businesses respectively from six months ago.

"The signs of spending optimism we saw in the fourth quarter of 2010 are continuing," said Thomas E. Richards, president and chief operating officer, CDW of "Business IT decision-makers appear to be more confident about making investments in hardware, software and services."

In addition to positive expectations for hardware and software spending, more than half of IT decision-makers in medium and large businesses expect to spend more on IT solutions in the next six months (56 percent and 57 percent, respectively). While overall the majority of those increasing spending on solutions in April expect it to be in virtualization (62 percent) and security (58 percent), most at medium and large businesses also predict they will spend more on cloud computing in the very near term (57 percent and 52 percent).

"During the recession, IT departments were challenged to find ways to reduce costs while maintaining productivity," said Richards. "Virtualization and cloud computing emerged as key tools to help keep costs down and increase productivity. These tools combined with a more mobile workforce make the need for system security paramount."

The CDW IT Monitor, which has been tracking IT sentiment since 2007, shows that three-quarters of those surveyed expect to replace or install new hardware or software in the next six months. The report noted that this is largely consistent with December’s record high expectations of these measures, with hardware up four percentage points in October and up five percentage points year over year.

The overall IT Growth Outlook (formerly the IT Growth Monitor Index), which measures six-month expectations for budget and staffing along with hardware and software procurement, is 67 for April 2011, down one point from December due to a lowered government budget outlook and less optimism for hardware and software purchasing by small businesses.
The report also found sentiment among small businesses has leveled off after growing in the last quarter of 2010. Small business lost three points in the small business IT Growth Outlook from December (an index score of 51 versus 54), but is still two points above April 2010 (an index score of 49).