Veritas Study: IT Execs Flying Blind

A study commissioned by Veritas Software Corp. (Nasdaq: VRTS) found that around half of U.S. IT executives say they have no idea what their hardware utilization rates are -- even as most of them are continuing to make new investments in IT infrastructure.

Veritas contracted U.K. research firm Dynamic Markets Ltd. to analyze the effects of "the global economic slowdown" on companies in the United States and Europe, Middle East, and Africa (EMEA). The report was based on interviews with 704 senior executives from large companies.

According to the study, 52 percent of U.S. IT executives say they are unsure of their hardware utilization, whereas in EMEA, only 7 percent are. In the U.S., 71 percent of the IT heads are not sure what an acceptable hardware utilization rate should be, compared with only 9 percent who are unsure in EMEA.

At the same time, the study found that over the last 18 months, 71 percent of U.S. IT departments made new investments in their infrastructure, versus 46 percent of EMEA IT departments. Meanwhile, only 5 percent of U.S. IT directors believe they are utilizing their hardware at an "acceptable" rate.

So let's get this straight: U.S. IT executives are less sure about how efficiently their current infrastructure is operating, but they're spending more on infrastructure. Are American businesses simply worse at keeping track of their technology assets than those in the rest of the world?By way of explanation, the report notes that U.S. corporations have been more deeply affected by the sour economy. In the U.S., 32 percent of respondents have seen a decrease in the size of their company, compared with 17 percent in EMEA. In the U.S., 48 percent of companies reported having had layoffs, compared with 31 percent in EMEA.

"The U.S appears to have been hit harder by the recession in terms of decreases in number of employees... when compared to EMEA," says Veritas spokeswoman Stephanie Graves Xavier.

But the report does conclude that American businesses have overbuilt their storage and server capacity for their current needs, compared with their counterparts in other countries. Perhaps we can ascribe this phenomenon to the excessive appetites in the New World?

Note, however, that Veritas -- the exclusive sponsor of this research -- has a vested self-interest in promoting the notion that companies should spend more on software to make the best use of hardware they've already acquired. Veritas sells software that's supposed to allow administrators to get a better window into what's running in their data centers.

The Dynamic Markets study, "Corporate Issues Associated with an Economic Upturn: A Comparison between the USA and the EMEA Region," was based on interviews with 101 executives in the U.S. and 603 in the U.K., France, Germany, Spain, Italy, Sweden, Switzerland, Benelux, and South Africa.Other studies forecast IT spending at flat to slightly down for 2003 compared with last year. A survey by Goldman Sachs & Co. found an average of 1 percent overall decline in IT spending for the year, although storage networking remained relatively strong (see IT Spending Suffers Hangover).

Todd Spangler, US Editor, Byte and Switch