Tuesday, January 02, 2007

Get The Ax!

Great news for 2007! It looks like IT spending is going to be anemic, hovering around a 2 percent increase. Overall, the hidden gem here is that it looks like hardware spending is starting to be permanently reduced, which is great for the environment. One survey did suggest that 55 percent of CIOs said they going to increase spending on hardware, but I think this is mostly storage related, and temporary. Software spending is going to stay at about 6 or 7 percent.

Why so happy? Because this suggests that the green crunching has finally begun, where companies start cutting their maintenence budgets (mostly hardward related), and start increasing their software budgets (mostly innovation).

A few folks are mourning the loss of the IT money tree, with comments like
"IT spending will moderate going forward, but, to give a more positive spin to all the dismal stuff, IT spending will probably be much better than other components of business investment.” Also, some are reflecting on the fact that spending is stalled. But I'm euphoric - chop, chop.


matt_stansberry said...

Interesting idea Mark. The other side of this might be that companies are going to be spending more in '07, upgrading to more energy efficient equipment.

I don't have any data on this right now, but we're preparing to do a Data Center purchasing intentions survey in early '07. I'll let you know how that works out.

Mark Ontkush said...

Great, I would be very interested and will write it up.

It's true about the energy efficient equipment. What is the right decision - keep what you have or upgrade?