Survey: Storage Spending Will Slow

IT users are sending mixed signals on storage spending, according to Wall Street surveys

July 2, 2005

3 Min Read
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IT users are sending mixed signals on storage spending, according to recent surveys by Wall Street firms.

Robert W. Baird & Co. Inc.s annual survey of 80 end users found the spending outlook for the rest of 2005 healthier than last year, while 200 CIOs surveyed by Citigroup Smith Barney reported less optimism about spending than they had last quarter.

In the Baird survey, 40 percent of end users forecast IT spending will rise over last year, and 85 percent said they would spend at least as much as last year. In Baird’s 2004 survey, only 64 percent said they would spend as much or more than the previous year.

According to Baird, users expect servers attached to network storage to grow from 40 percent to 68 percent over the next two years, driven by a growth of virtualization, SATA drives, blade computing, and iSCSI.

The Baird survey also found:

Citigroup Smith Barney’s June quarterly survey delivered a weaker outlook across disk-based storage, storage networking gear, and tape than the March survey. Large enterprises with sales of more than $10 billion were the most pessimistic.

“Although we would expect deteriorating sentiment in the June survey due to seasonality, the magnitude is concerning and bears further monitoring,” Citigroup’s Paul Mansky wrote in a research note on the survey. “While the percentage of respondents expecting their storage budgets will grow in the coming year remained relatively unchanged, those previously suggesting flat or undecided spending plans are now leaning to declines.”

According to Citigroup Smith Barney:

  • 31 percent expect spending of disk-based storage to increase, while 18 percent expect decreased spending on storage from last year. In the March survey, 30 percent expected disk spending to increase while only 9 percent forecast a decrease.

  • 28 percent say spending on storage networking gear -- switches, HBAs, etc. -- will increase, and 14 percent say it will decrease this year. In March, 29 percent forecast increased spending, compared to 6 percent expecting decreased spending.

  • 26 percent say tape spending will increase, and 19 percent say it will decrease. In March, 22 percent said it would increase, compared to only 10 percent expecting a decrease.

— Dave Raffo, Senior Editor, Byte and Switch

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