Survey: Data storage to see increased spending in '09

A survey of US and UK IT folk shows overall budgeting on data storage technology is expected to increase by a marginal amount (.05%) this year, but it is in stark contrast to other hardware categories, which showed spending declines of between 2% and 3%.

The results of a survey of about 450 technology professionals released Wednesday found that of 26 technology categories, data storage was the only technology for which spending would increase this year.

The survey, of 300 professionals from the U.S. and 151 from the U.K., from companies ranging in size from having as many as 31 PCs to those with more than 500 PCs. The survey was performed by Millward Brown Research International and Lightspeed Research and took place from Dec. 15 through Dec. 31, 2008 using the social networking site LinkedIn . Eighty-five percent of the respondents identified themselves as IT decision makers and 15% said they were IT implementers.

The U.K. respondents had a more pessimistic view on future economic conditions compared to the U.S.; 50% of U.K. IT workers think there will be fewer jobs available in IT in the next 6 months, compared with 28% of US counterparts.

Out of 70% of the companies that indicated they have reacted with some changes to the current economic climate, 60% said they had cut their operating expenditures, almost 50% were on a hiring freeze, and 40% laid off people.

Data storage dodges the bullet

When it came to IT spending, overall budgeting on data storage technology was expected to increase by a marginal amount (.05%), but it was still in stark contrast to other hardware categories, which showed spending declines of between 2% and 3%.

"Storage technology is similar to insurance in the financial services industry. In times of a recession, you have to manage your risk. Storage protects what you have and reduces risk," said Steve Ingledew, managing director of Millward Brown Research's Technology Practice.

Sixty-five percent of the respondents said they expect a change in technology spending over the next year. On average, IT budgets were expected to shrink by 4.1%.

Spending on desktops, notebooks, servers, and hand-held devices was expected to drop by 3.2%, 2.8%, 2.5% and 1.8% respectively. Spending on printers, displays, and other peripherals was expected to drop by 2.8%, 2.5%, and 3.2% respectively.

Software spending was expected to drop anywhere from .05% to 1.7% this year depending on the underlying hardware technology, with OS spending down 1.3%.

Networking and telecommunications equipment spending was also expected to be off this coming year. Spending on LANs, WANs, Internet/Intranet/Extranet and telecom equipment spending were expected to be down 1.5%, 1.2%, .6% and 1.2% respectively.

When asked about the key challenges facing them in the coming year, the technology decision makers cited "meeting the same or similar objectives with lower IT budgets". To address these challenges, 84% of respondents in enterprises and 77% of mid-market companies stated the most important area requiring support from technology providers was "achieving cost efficiencies from our existing IT environment."

Next big thing: Virtualization

Asked about nine technology trends would impact the industry most over the next five years, virtualization was overwhelmingly the top choice with 54% of respondents choosing it. The trends also included web-oriented architectures (44%); unified communications (35%); social software and social networking (34%); business intelligence (32%); green IT (31%); cloud computing (30%); specialized systems/appliances (17%); other (1%).

In small companies, Web-oriented architectures was considered to be the major trend.

"I don't think I was surprised to see virtualization up there, but I was surprised to see it so far ahead in enterprise organizations [69% in enterprises compared to 24% in small companies]," Ingledew said. "Within context of what's going on in the economy it makes a lot of sense because organizations are trying to do more with less. They're trying to eek out every thing they can from there existing infrastructure."

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