Chief information officers are cutting back their technology spending outlook for the next 12 months and most of them don't see Google as an enterprise application provider, according to a survey by Deutsche Bank and CIO magazine.
First, the spending outlook. In a poll released in a Deutsche Bank research note today CIOs say they expect their IT budgets to grow 5.1 percent over the next year. That's down from the 5.8 percent growth expectation in December.
Underneath the surface, CIOs' outlook is colored by the size of their companies. CIOs at very large companies with more than 5,000 employees are projecting IT spending growth of 7 percent over the next 12 months, compared to 3 percent in December. CIOs at small firms (100 to 500 employees) are also optimistic projecting 10 percent technology spending growth over the next 12 months, up from 7 percent in December.
The outlook gets muddy among mid-sized firms with 501 to 1,000 employees. CIOs at mid-sized companies are projecting IT spending growth of 4 percent in the next 12 months, down from an expectation of 9 percent in December. Large firms (1,001 to 5,000 workers) and very small ones (1 to 100 workers) were slightly less optimistic about their technology spending.
- 46 percent of CIOs say it's "not very likely" that they will consider Google as a provider of enterprise software and 27.4 percent said it's "not at all very likely." The good news: The remainder said it's at least "somewhat likely" that Google could provide enterprise software to them.
- CIOs are going to devote their dollars to hardware. Of those surveyed, the poll found that 45.5 percent of CIOs will increase their hardware purchase over the next 12 months. That's down from 55.8 percent in December. Most of the money is flowing into volume servers--also known as commodity servers.
- Data networking spend is growing. Among CIOs surveyed, 48.4 percent said they will increase their spending on data networking over the next 12 months. That's up from the 35.4 percent that said they would increase networking spending in December.
- The IT labor supply is in balance to tight. Only 7.3 percent of CIOs described the IT labor supply as "plentiful" with 46 percent saying workers were "available." The remainder (44.4 percent) say workers were "hard to find."