Survey Suggests Higher IT Spending In 2006
Mary Crane, 05.31.06, 8:31 AM ET
Information-technology spending budgets are likely to increase, on average, 5.2%, year-over-year, in 2006 and 4.8% in 2007, according to a recent Merrill Lynch survey of 75 U.S. and 25 European chief information officers.
Overall IT spending growth should increase 7% to 8% in 2006, wrote Merrill analyst Richard Farmer, driven by a healthier small- and medium-business market which, according to distributors like Ingram Micro (nyse: IM - news - people ) and Tech Data (nasdaq: TECD - news - people ), have outpaced overall IT spending over the last couple of years.
So what are the CIOs spending their bigger budgets on?
Farmer said the highest-growth areas included laptops, applications software, networked storage, networking equipment and security.
The survey also found that 89% of the respondents said Apple’s Boot Camp, which allows Windows XP to run on Intel (nasdaq: INTC - news - people )-based Mac computers, won’t impact future Mac purchases. The other 11% said they will change their spending plans less than 1%.
The bottom line, Farmer said, was that most CIOs are unwilling to pay a premium for Mac computers.
In the overall server market, the survey found, Hewlett-Packard (nyse: HPQ - news - people ), IBM (nyse: IBM - news - people ) and Dell (nasdaq: DELL - news - people ) were winners over Sun Microsystems (nasdaq: SUNW - news - people ). CIOs perceived these companies’ products to be more power efficient -- a quality 28% of the survey respondents said mattered in their purchasing decisions -- than Sun.
Farmer said Sun’s poor showing was likely due to the recent introduction of its more power-efficient platforms like the new T1 Niagara servers, which he said were still in the "tire-kicking stage."
But the survey offered some good news for Sun Microsystems. About 75% of the survey respondents said they think Sun’s Solaris operating system is better on x86 servers than Linux.
"Although it’s too early to call a trend, we have heard anecdotally of instances where Solaris is replacing Linux," Farmer said. "This would be bullish for Sun if it became widespread."
Finally, in the ongoing market-share battle between number-one chipmaker IBM and its number-two rival, AMD, Farmer said 80% of the CIOs surveyed expected no change in their chip preference for server purchcases. Still, a weighted average of the survey responses showed a small 1.4% shift in AMD’s favor. |
