Corporate Software Spending Continues to Improve

by Jean Crumrine | February 16, 2010 5:00 am

ChangeWave’s latest corporate software spending survey shows the business software spending environment continuing to improve. The January 12-22 survey points to the best overall spending outlook in more than two years.

A total of 1,635 respondents involved with software purchasing in their company participated in the ChangeWave survey.

Corporate Software Spending 90-Day Outlook

A total of 18% of respondents say their company will spend more on software over the next 90 days — a 2-pt improvement from the previous survey in October 2009[1]. Just 15% now say they’ll spend less — 3-pts better than previously.

In a further bullish sign, corporate capital budgets have registered an improvement for the fourth consecutive survey.

A total of 14% of respondents say their company’s capital budget increased over the past 90 days — 4-pts better than previously. And while 21% still say their cap budget has adjusted lower — that’s also 4-pts better than previously and a huge 25-pt improvement since the low of a year ago.

Leading Software Categories Going Forward

A key focus of the ChangeWave survey is on corporate software spending increases and decreases within specific software categories. And in a highly promising sign, we’re seeing a projected net increase in spending for the next 90 days across multiple software categories.

The following categories registered the biggest improvements since October:

When we asked software buyers to tell us the key reasoning behind their software spending plans going forward, two trends stood out from the rest.

• 21% said the driving force in their firm’s software purchasing decisions is their existing software is getting outdated and must be replaced — 1-pt higher than previously.

• Only 15% cited a general slowdown in business conditions and capital budgets as the factor most driving their purchasing decisions — 2-pts better than in October.

Software Companies With Momentum

At the software vendor level, Microsoft (MSFT[2]; +8-pts) continues to show the greatest signs of software market strength going forward — with the new Windows 7 operating system clearly driving that momentum.

McAfee (MFE[3]; +4-pts) is also showing an uptick going forward. The recent cyber attacks from China have highlighted increased concerns over corporate vulnerability — and McAfee appears well-positioned to profit from the increased demand.

Other vendors showing signs of momentum going forward include Hewlett-Packard (HPQ[4]; +3-pts) and Citrix (CTXS[5]; +3-pts) — each up 3-pts from previously.

We note that Microsoft and Hewlett-Packard recently announced a partnership for research and development of cloud-computing solutions. Citrix also provides cloud computing services, as well as virtualization software.

Paul Carton co-wrote this article.

Tell us what you think here[6].

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Source URL: https://investorplace.com/2010/02/corporate-software-spending-continues-to-improve-msft-mfe-hpq-ctxs/

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