Fortune 1000 to See 14% Decrease in 2009 Storage Budgets

TheInfoPro (TIP), an independent research network and supplier of market intelligence for the Information Technology (IT) industry, announced new findings on 2009 storage budgets among Fortune 1000 (F1000) enterprises. According to this new research, the average F1000 organization is facing a 14% decrease in its 2009 budget.

In addition, 68% of companies expect to spend less in 2009 — with only 21% of those interviewed planning to spend more than $10M, an almost 10% drop from 2008. Financial Services continues to be a weak sector, with 68% of respondents expecting to decrease storage spending. However, 75% of Technology organizations and 63% of Manufacturers also cite significant declines in 2009 spending levels.

Key Findings include:

• Thirty-two percent (32%) spent less in 2008 as compared with the amount that had originally been budgeted, bringing the average 2008 spend to $10.7 million.
• Only 32% of clients expect to spend the same or more in 2009 vs. 2008 down from 81% in the 2008 vs. 2007 period.
• The average 2009 budget cut vs. actual 2008 spending represents a 14% decrease.

The studies are conducted twice a year and include discussions about spending with the organization’s major storage suppliers. EMC, NetApp, HDS, IBM, and HP are among the names receiving mentions.

“We started to witness potential softness when we completed the initial 2008 Storage spending study in Q2, and as would be expected, the just-released Q4 update shows a material decline,” comments Ken Male, CEO of TheInfoPro. “The macro economic environment has been a driver for the spending decrease in 2008 compared with 2007, along with the reduced planned spending for 2009. However, excess capacity and the procurement of lower-cost tiers of storage have also contributed to the considerably lower Q4 ‘budget flush’ that we’re witnessing compared to previous years.“

A hallmark of TIP research is the narrative commentary that is captured during the course of the one-on-one interviews — which were conducted from late September to mid-November of this year. With regard to the budget and spending decreases, the following comment from an IT pro at a Fortune 1000 Financial company best exemplifies current sentiment: “Risk and need for storage have not gone away, and volumes are increasing, so the appetite for storage is still high — but we have no dollars to spend.”