Spending On Hardware Up But Staff Levels Still Flat

Spending on technology hardware and software is expected to rise back to pre-financial collapse numbers from August 2008, said a report by hardware and software reseller vendor CDW.

In a recent survey of 1000 IT decision makers, 67 percent of government and corporate sectors are reporting they will make hardware purchases in the next six months.

Hiring for IT staff, however, is expected to stay flat with 81 percent of corporations saying they will keep staff at current levels over the same time period.

The least amount of IT spending will be coming from small companies with 41 percent making hardware purchases, and 53 percent making software purchases. The numbers for medium and large companies are much more robust—75 percent of medium-sized companies will be buying hardware and 76 percent buying software. The largest companies are a bit higher with 81 percent spending on hardware, and 85 percent spending on software respectively.

“The confidence we began to see emerging in April with decreases in planned job cuts has now evolved into planned capital investments in IT infrastructure to increase efficiency and productivity,” said Mark Gambill, CDW market insights executive in a news statement.

“Hardware refresh cycles have been pushed to limits we’ve rarely seen, and anticipated investment in this area is encouraging as companies prepare for a larger economic recovery. The down side is that the percentage of organis

ations planning investments in IT staffing has held steady and in some cases has declined.”

Other data presented in the study reveals 84 percent of Federal government purchases will be in technology hardware, 86 percent in software. Nine out of 10 Federal spending decision makers think IT investments help organizational efficiency, according to the report.

A similar study on IT spending for 2010, however, is not as optimistic on hardware purchases as CDW. Spending on IT is expected to rise in 2010 by 3.3 percent, said a recent Forrester Research study, but hardware purchases are expected to remain flat.

“[Next year] is about balancing the focus on cost, risk and growth,” Gartner analyst Peter Sondergaard said in a statement. “For more than 50 percent of CIOs, the IT budget will be 0 percent or less in growth terms. It will only slowly improve in 2011.”

eWEEK’s Jeff Burt wrote: “The battered hardware industry saw spending in 2009 drop 16.5 percent, to $317 billion, and spending will be flat next year. By contrast, the telecommunications hardware business will see a 4 percent decline, and spending will grow in 2010 by 3.2 percent, according to Gartner.”