Finally, Good News -- US Tech Recovery in Process; Techtel Tech Demand Index
Finds Growth in Technology Purchases, Consideration in Q4 2001
Business Editors/High-Tech Writers
EMERYVILLE, Calif.--(BUSINESS WIRE)--Feb. 14, 2002--
Technology Buyers Returning Despite Hangover
From Recession, Terrorist Attacks
In the most positive signal for the technology sector in over a
year, demand for IT products established a rising trend in the 4th
Quarter of 2001, according to the latest study by Techtel Corporation,
a leading market research firm which tracks demand for information
technology solutions.
The Q4 2001 Techtel Tech Demand Index(TM) (see table below)
indicates a stable, gradual recovery for the technology hardware
sector. The General Tech Demand Component (PCs, Notebooks, Copiers and
Printers) registered a gain in Purchase and Consideration while the
Enterprise Tech Demand Component (servers and storage) showed a
recovery from low Q3 Purchase Level. Continued improvements are
expected after low Q3 consideration works its way through the
pipeline.
"The really good news from Q4 2001 is: demand is rising," said
Michael Kelly, chairman and chief architect of Techtel Corporation.
"Our data indicates that, as a whole, the IT market is stable and
should continue to improve barring another major shock to the system."
History
The Techtel Index rose sharply through 1999 and early 2000,
reaching 173.6 in Q2 2000, then flattened in Q3 2000, and fell 14% to
147.0 in Q4 2000. Since then the index has risen to the current 162.4
in Q4 2001, which is still near historically high levels.
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*T
Techtel's Tech Demand Index(TM)for Hardware Buyers and Considerers
3Q98 4Q98 1Q99 2Q99 3Q99 4Q99 1Q00
Overall Business Hardware
Demand
Overall Hardware Purchase
Index 100 81.4 79.3 96.5 102.8 116.9 134.5
Demand Components
General Business
Purchase 100 88.1 78.4 92.9 106.0 97.1 121.5
Enterprise IT Purchase 100 74.7 79.1 98.8 97.7 132.7 139.4
Overall Potential Future
Demand
Overall Hardware
Consideration 100 98.6 107.8 110.8 124.9 124.6 161.8
Potential Future Demand
Components
General Business
Consideration 100 91.5 90.1 97.4 116.1 119.8 148.1
Enterprise IT
Consideration 100 105.8 126.9 123.7 131.5 126.8 172.5
2Q00 3Q00 4Q00 1Q01 2Q01 3Q01 4Q01
Overall Business Hardware
Demand
Overall Hardware Purchase
Index 173.6 173.8 147.0 150.9 154.6 155.0 162.4
Demand Components
General Business
Purchase 142.6 149.3 137.5 130.7 118.3 149.9 132.4
Enterprise IT Purchase 196.2 187.3 144.5 159.3 182.1 134.6 163.1
Overall Potential Future Demand
Overall Hardware
Consideration 166.8 166.8 148.0 156.1 154.8 149.3 156.7
Potential Future Demand
Components
General Business
Consideration 150.5 153.8 145.4 144.4 132.3 146.1 150.8
Enterprise IT
Consideration 180.4 176.4 146.3 163.3 174.2 143.6 153.3
3Q98 = 100
/a The index is based on quarterly changes in reported purchases or
purchase considerations across eight hardware categories
*T
In particular, purchase and consideration for Enterprise IT
products returned to levels consistent with quarters prior to the
September terrorist attacks. Sales in the General Business Component
fell slightly from Q3 2001 but remain on an up-trend.
"We forecasted that the Enterprise Component recovery would be
lengthened for at least a quarter because the evaluation of big ticket
IT solutions essentially stopped after September 11," said Kelly. "The
latest data supports this, indicating that the reduced consideration
in Q3 is still working through the system."
Current Findings from Techtel's Demand Truth(TM) research:
BEA Demand Falls, New Strength for HP-Compaq, Brocade and EMC Rise
Based on findings from Techtel's Q4 Demand Truth(TM) Study (see
"about methodology" below), Techtel makes the following predictions:
-- In Q4 2001, the data predicts a slowdown in future application
server sales of BEA Systems (Nasdaq:BEAS) stemming from low
brand awareness, a rise in negative opinion, and flat
consideration in comparison to competitive products from IBM
(NYSE:IBM) and Oracle (Nasdaq:ORCL). Recent purchases at BEA
are also substantially off Q2 and Q3 2001 levels.
-- The data indicates an increased probability of strength
returning to PC demand. This could turn an oft-quoted negative
of the HP-Compaq (NYSE:HWP)(NYSE:CPQ) merger into a real plus.
In addition, Compaq has leadership in entry-level servers, and
the HP addition would make a powerhouse in Brand Attraction
Strength. (Brand Attraction Strength is Techtel's measurement
of awareness, positive opinion and current purchase
consideration).
-- In the storage category, EMC (NYSE:EMC) and Brocade
(Nasdaq:BRCD) scored high points in areas of Brand Attraction
Strength. Techtel believes, based on cumulative research data,
that EMC and Brocade are positioned for outperformance in the
storage category in future quarters of growth.
Investors Demand Truth
The current Enron situation illustrates the fallibility of relying
solely on financials supplied by corporations and their auditors. The
Techtel Tech Demand Index(TM) is an independent, objective survey of
IT sales and future demand utilized by technology investors and
academia. It has served as a barometer for general IT sales trends as
well as performance of specific technology companies in their
respective categories for over 18 years.
"Techtel's Demand Truth model bypasses the opinions of corporate
management, financial analysts, and even accounting data by going
directly to the customers, where demand begins," said Kelly. "This
provides real visibility into demand for technologies and technology
companies. It's demand truth -- not management hopes, PR hype, or
accounting games."
About Techtel Demand Truth Methodology
Techtel surveys two U.S. based high technology audiences on a
quarterly basis:
-- General business technology buyers
-- Enterprise technology buyers
This is accomplished through use of Techtel's proprietary survey
panels. Each panel has between 1,500 and 2,000 participants. For any
given quarter, roughly 40% to 60% respond to a survey. Respondents are
asked to rate their awareness, opinion, consideration, evaluation, and
purchase of IT products or services. Surveys are mailed about 2 weeks
prior to the end of the quarter.
The Techtel Enterprise Tech Demand Index(TM) is comprised of
Actual Purchases within the quarter and Consideration (Potential
Purchase) of Mainframes/High End Servers, Mid Range Servers, Low-End
Servers and High-End Storage.
The Techtel General Business Tech Demand Index(TM) is comprised of
Actual Purchases within the quarter and Consideration (Potential
Purchase) of PCs, Notebooks, Copiers and Printers.
Actual Purchases identifies current demand, Consideration helps
predict future demand. To purchase a copy of the study, contact
Techtel at 510/655-9414
About Techtel Corporation
Techtel Corporation, in Emeryville, Calif., tracks market demand
for IT solutions in 40 categories and nearly 100 companies. Techtel
has been conducting the demand growth study every quarter since 1984.
Techtel also measures advertising effectiveness, brand equity and
customer loyalty. Leading technology companies such as Compaq, EDS,
IBM, Intel and Oracle rely on Techtel's research information to
measure the effectiveness of their marketing/sales and service
efforts, and advice on how to capture more demand. Wall Street firms
such as Merrill Lynch and Fidelity Investments rely on Techtel's
research in predicting movements in stock prices based upon brand
equity changes. For more information about Techtel, please call
510/655-9414 or visit them on the web at techtel.com.
--30--lr/sf* dc/sf
CONTACT: Panache Communications
Sharon Sim-Krause, 415/330-0885
sharon@panachecom.com
KEYWORD: CALIFORNIA
INDUSTRY KEYWORD: COMPUTERS/ELECTRONICS HARDWARE PUBLISHING
SOFTWARE PRODUCT
SOURCE: Techtel Corporation
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