(31-Dec-10) Is there light at the end of the economic tunnel? The past year has shown a more favorable economic climate than 2009, but is more favor enough to tip the investment scale for small to midsized enterprises in 2011? If the tunnel is getting brighter, what will enterprise data center and IT departments spend their money on in 2011? Or will enterprises see the darker regions of the economic tunnel in 2011?
Richard Gordon, research vice president of global forecasting at Gartner, says a favorable economic climate in 2010 doesn’t necessarily mean that enterprises were ready to spend money on big investments. “Despite stabilization in the global economy, businesses remained very cautious about investments in 2010,” Gordon says. “We saw essential spending freeing up, which is why we saw increased spending in hardware in general as the replacement cycle kicked back in, but discretionary spending is still on hold.”
Darin Stahl, lead research analyst for Info-Tech Research Group, says cautionary spending is reflected in changing refresh cycles. “First, looking back at 2008, IT spending was robust, with many enterprises executing a good deal of infrastructure refresh for anything acquired in 2005 or earlier,” Stahl says. “The 2008 refresh cycle was significant in its volume as well as the scale and efficiency of infrastructure it ushered into enterprise IT. Second, during the economic downturn, many IT shops learned to revisit the refresh cycles during their cost-cutting initiatives.”