2010 holds better promises for IT spend

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2010 holds better promises for IT spend

Goldman Sachs' latest IT spending survey shows that Infrastructure, application development, and systems integration will remain top spending areas for the next year

Thursday, November 26, 2009

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BANGALORE, INDIA: The recession seems to be fast bottoming out as far as the IT industry is concerned, with 2010 holding better spending promises, as per a survey.

Goldman Sachs' latest IT spending survey shows that infrastructure, application development, and systems integration will remain top spending areas for the next year, especially as CIOs start to consider newer technologies such as virtualization and cloud computing.

There is pent-up demand in hardware for storage and server/PC refresh. The appetite for offshore services appears to be below trend at current levels, the survey indicated.

"HP, NetApp, CommVault, Red Hat, Riverbed, and Salesforce.com are notable names showing positive upward momentum in our latest survey," Goldman Sachs said.

According to a Cnet report, Goldman sees the strengthened results from Red Hat and Salesforce.com, and increased popularity for VMware and Citrix in software, as good indication of internal and external cloud deployments gaining momentum.

Ninety-four per cent of survey respondents intended to upgrade to Windows 7, underscoring Goldman's thesis that "pent-up demand and a hardware refresh should fuel a robust Windows 7 product cycle." The survey showed that 32 per cent expected to upgrade in 2010 (9 per cent in 1H, 23 per cent in 2H), while another 28 percent anticipate an upgrade in 2011.

"With the majority of the installed base (around 85 percent to 90 percent) still on Windows XP, and XP support expiring in April 2014, we believe that 2013 becomes a de facto deadline for upgrades," the survey said.

In regards to professional services, survey results reflect a material uptick in respondents indicating increased budgets for discretionary spending in the next six months, which is consistent with Goldman's view that discretionary IT spending will likely trend upward into 2010 on the back of an improved macro and corporate profit backdrop, the Cnet report noted, citing the survey.

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