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Upgrading Systems, Upending Budget Constrictions

There seems to be an uptick in the amount of news that seems to bolster the argument that companies really are spending more than they had been in the past two years. First, VARBusiness Magazine has come out with its own State of Enterprise Spending research that found many companies are in "upgrade mode." In fact, the average life span of a PC in most enterprises is three years or less among 90 percent of all companies surveyed, with 68 percent noting that the average age of their PCs was two years or less. CIOs are loosening the purse strings, but with very specific goals: Increase ROI.

This is aided and abetted by Microsoft's decision to stop selling Windows NT within two years (See "Windows NT 4.0 Is Dead, Please Bring It Back!"). Companies are concerned about being left out in the cold with rusty technology, and so they are starting to shop around now.

Pricing is coming down, too. Last week, I spoke with Brian Cox, server product line manager for HP, who said he was seeing customers starting to buy again, particularly industry-standard processors (i.e., they are moving away from RISC). As if to prove the point, HP announced at the Intel Developer Forum this week that a number of telecom companies, including China Telecom, Cogeco Cable Canada and Telefonica de Espana have moved from Unix-based systems to HP Integrity platforms, which are based on Intel Itanium 2 processors. According to Cox, companies are making that switch because they see better value with industry-standard processors. Platforms such as Integrity let companies run Windows and Unix flavors, so it's very flexible, and, therefore, appealing to customers running multiple platforms.

And tech stocks have been performing fairly consistently as well. All of which could add up to a Spring fever of growth, as companies realize they need to upgrade, update and upend their old way of doing business if they want to be viable contenders.