The Washington Times - May 13, 2008, 03:38PM
The lack of confidence in the momentum and direction of the IT marketplace has spread from small businesses to medium-sized firms, according to the latest reading of the CDW IT Monitor, a bi-monthly indicator of sentiment in the U.S. IT industry.\ \ \ The overall CDW IT Monitor index dropped one point to 72, compared to February’s reading of 73. In the medium business segment, the IT Growth Monitor, a sub-index measuring anticipated investment in IT, dropped seven points from February and posted a reading of 70. Additionally, 21 percent of medium size businesses expect to hire IT staff in the next six months, down 10 percentage points from two months ago.\ \ \ “There is a hesitancy on the part of IT decision makers to invest heavily in new staff or infrastructure in a volatile economic environment,” said CDW Vice President Mark Gambill, the company’s executive responsible for market insights. “This trend was first noticeable in the small business sector in the previous IT Monitor two months ago, and now the uncertainty is spreading to medium size businesses.”\ \ \ The CDW IT Monitor is based on an online survey of at least 1000 IT decision makers from businesses of all sizes and all sectors of government. Data breakdowns for all corporate and government segments are available at www.cdwitmonitor.com.\ \ \ The previous CDW IT Monitor in February revealed a definitive gap between the small business sector and medium and large businesses with regard to confidence and prospects for growth. In the small business sector, the IT Growth Monitor registered at 51, compared to 77 for mid-size and 80 for large businesses.\ \ \ In contrast to the small and medium business sectors, the April IT Growth Monitor for large businesses remained steady at 80.\ \ \ “In the case of large businesses, many budgets have already been approved, and there is less volatility at the onset of changes in the economy,” said Gambill. “However, if economic conditions continue to weaken, it will be interesting to see how this trend develops as we approach the second half of the year.”\ \ \ While prospects for growth in IT investment have declined, the value that decision makers place on IT and its role within the organization remained steady. Eighty-two percent of overall IT decision makers (including 88 percent of medium size businesses) believe that IT is effective in helping to achieve the company’s mission and goals. Additionally, the IT Value Monitor, which measures the perceived value of IT, registered a score of 76 — unchanged from the February 2008 IT Monitor.\ \ \ “Even in the midst of an economic downturn, the perceived value technology brings to an organization stayed strong,” said Gambill. “It’s also important to remember that not all IT spending has stopped. There’s a barbell effect in which organizations are likely moving forward with investments at the ends of the IT spectrum. Projects such as large enterprise migration or small equipment replacement might be moving forward while mid-sized investments that are not absolutely necessary are being placed on hold until economic conditions improve.”\ \
  • Fewer than half (45 percent) of small businesses see IT investment as helping their bottom line, down seven percentage points from December 2007.\
  • One in five companies (20 percent) report IT problems that disrupted customer needs on at least six days in the last six months, up from 14 percent in December 2007 and 16 percent in February 2008.\
  • Medium size businesses registered a four point decline in the overall Monitor reading, from 77 in February 2008 to 73 in April\
  • One in six (17 percent) of government organizations expect decreasing IT budgets over the next six months, and 8 percent expect to reduce staff.
  • Forty percent of government organizations are planning on increasing their IT budgets in the next six months compared to 45 percent in February.\
  • Fifteen percent of government organizations are planning on hiring additional IT staff in the next six months compared to 16 percent in February.\
  • Fifty-five percent of government organizations had two or more days of IT outages that disrupted the needs of clientele.
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    — Mark Kellner, The Washington Times