Cowen/Datamation Corporate Computer
User Survey: Technology Spending Will
Remain Strong Through 2000
Wealth of Investment Opportunities Driven by Move to
Distributed Computing
BOSTON, Sept. 17 /PRNewswire/ -- Cowen & Company, the
technology research and investment banking firm, and
Datamation magazine, a leading information technology
publication for IT executives, have released the findings of their
20th annual networked computing, server and PC user survey.
Cowen's institutional research analysts analyzed responses
from close to 1,200 Datamation readers about their corporate
technology spending, purchasing and strategy plans. The
results are eagerly awaited by investors and vendors as a
measurement of technology trends and the fastest growing
technology suppliers. Full results will be printed in the
December 1997 issue of Datamation.
Spending Looks Strong
According to the survey, overall technology spending will rise
10% annually through 2000. Desktop PC unit volume is
expected to grow 17% in '98 after a 15% rise this year. This
business continues to consolidate to the leaders and shift to
direct channels. Dell will benefit. The robust overall pace is
driven by a high backlog of applications, the shift toward
intranet architecture, a rush to solve the Year 2000 problem
and the rapid growth of Microsoft's Windows NT operating
system.
Client server-based systems will continue to grow, but with
80% penetration, is no longer the fastest growing architecture.
Intranets, elaborate internal internet systems, were deployed
by 35% of new sites this year, up from 15% last year.
Adoption of client server and intranet technologies are fueling
further spending by organizations, with their budgets growing
1.5-2.5 times faster than those companies not adopting these
technologies.
Year 2000 Problem Spurs Spending
The Year 2000 problem (the need to reprogram applications to
deal with the change in date at the turn of the century) is
providing additional stimulation for growth. Seventy percent of
all technology users still haven't fixed the problem. About a
third of these companies are paying for a solution by
increasing overall technology spending. The balance are
taking the money from other IT areas. In 1997 the Millennium
change will cost companies 7.5% of IT spending. That figure
will grow to 9.4% in 1998 and decline to 8.4% in 1999.
Windows NT Gains Ground
In the battle to dominate operating systems, Microsoft's
Windows NT is coming on strong across all types of systems
and organizations. Unix still dominates higher-end users, and
will over the near term. The survey data showed the average
increase in spending on all packaged software accelerating
from about 8% in 1997 to 10% next year. Computer
Associates' Unicenter is gaining momentum in systems
management. Applications are hot. There is strong growth in
groupware, with Microsoft and IBM gaining. And adoption of
enterprise resource planning is on the rise, where SAP gets a
big boost from Windows NT and PeopleSoft is up across all
sites. The data shows new opportunities in supply chain
management and value chain software, and Cowen has strong
buys on Baan, Vantive and Intelligroup.
"The outlook for technology spending continues to be strong,
driven by the trend toward distributed computing. We're seeing
consolidation around the largest vendors, favoring the best
known brands," said Drew Brosseau, Cowen Managing
Director and Senior Research Analyst in charge of software.
The survey findings were presented at Cowen's twenty-fifth
annual Fall Technology Conference in Boston this week where
127 public and private companies presented to close to 700
investment professionals.
Hardware Outlook
IBM was supported by the survey: it stands to take share in
the burgeoning outsourcing market and gain in systems
integration. It's also capturing share of mind in the hot
notebook market. Meanwhile the data confirms that host
systems' recurring revenue is not going away. In enterprise
systems, the battle lines are increasingly being drawn
according to operating system, with Microsoft's Windows NT
gaining everywhere and taking control at the low end. Still,
Unix is holding its ground. Sun Microsystems, Compaq and
Dell look the strongest in enterprise systems, according to
the data.
Data Networking
Spending plans for data networking are on the rise, driven by a
robust new product cycle. The best growth opportunities are in
bandwidth expansion via switching (as bandwidth constraints
continue to rise), network extension via remote office,
multi-service networks, and network management. Cisco
Systems continues to dominate with end-to-end solutions and
a new product cycle starting to kick in. Bay Networks is
poised to gain share in all product categories. It, too, has a
new product cycle driving renewed revenue growth, plus
significant operating and channel leverage.
"Information Technology is at the center of virtually all
corporate strategy," said Dennis Eskow, Editor in Chief of
Datamation. "The Cowen conference brings us to the state of
the art in strategic thinking. Each year, Cowen's research,
especially its research of Datamation readers, pinpoints the
direction that corporations are sure to take over the coming
weeks and months -- both the corporations that use
technology and the ones that sell it."
Cowen & Company is a privately held full-service investment
firm based in New York City, The firm has 16 branch offices in
the United States, Europe, Canada and Asia. Its highly
regarded research and investment banking departments focus
on the technology, health care, telecommunications and
media/entertainment industries.
Datamation is a publication of Cahners Publishing Company,
a unit of Reed Elsevier, Inc. Datamation is the only magazine
that gives IT managers clear, in-depth technology solutions to
their business problems covering products, techniques and
technologies that span the enterprise. Datamation, published
monthly, covers desk-tops, networks, software, on-site
product evaluations, communications and IT services.
SOURCE Cowen & Company
North America,United States of America
PRNewswire
September 17, 1997 |
