CIO survey: Networking, Windows 7 key priorities; Security hampers cloud computing

Chief information officers expect their IT budgets to increase 2.8 percent in 2010 as technology executives become more optimistic about the economy, according to a Citigroup survey. Networking gear and Windows 7 PC upgrades remain a top priority as CIOs say they can garner better pricing from their vendors.

The Citigroup survey shows multiple moving parts in the industry as U.S. and European CIOs juggle their budgets. CIOs are optimistic, but the confidence isn't off the charts. To wit: 57 percent of CIOs are under-spending their 2010 budgets in the U.S. (60 percent in Europe).

The most notable slide in the Citigroup survey was the IT spending growth breakdown by vertical and company size. Here's the slide:

Among the key themes:

Networking is a top priority for CIOs. Indeed, 44 percent of CIOs expect to spend more money with Cisco. Just 16 percent of CIOs planned to increase spending on HP ProCurve gear. Citi analysts noted that CIOs may have been waiting to see HP's 3Com integration plans.

The PC upgrade cycle is real. CIOs say that only a third of their PC installed base can effectively run Windows 7. Dell looks to be the big beneficiary as half of the CIOs surveyed say they will allocate more of their budgets to the PC marker.

Cloud computing garners interest, but CIOs are generally worried about security. Key points:

• CIOs are piloting cloud technologies, but half of them remain skeptical.
• 43 percent of CIOs in Europe are planning cloud computing pilots in the next 12 months. In the U.S., that percentage is 36 percent. U.S. CIOs---52 percent plan no cloud computing efforts---are more skeptical than their European counterparts (47 percent have no cloud computing plans).
• 59 percent of U.S. CIOs cited security concerns as the main issue (65 percent in Europe).

Server and software spending remain top priorities. Meanwhile, CIOs are planning aggressive Windows 7 upgrade plans, which could slip a quarter. VMware continues to gain wallet share.

34 percent of U.S. IT budgets are spent on in-house IT professionals. In Europe, that percentage is 29 percent. Eighty percent of CIOs said they could pressure vendors for pricing concessions.