Member Avatar for Brian.oco

Businesses are snapping their wallets shut, at least when it comes to software spending - usually a good leading indicator of economic growth.

One key benchmark, the ChangeWave corporate software spending survey, has seen a shift into negative territory for the first time in years.

In its January, 2008 survey results, ChangeWave says that better than one-in-five respondents (22%) now say their company will spend less for software over the next 90 days compared to the previous 90 days -- 8 percentage points worse than our previous survey in October 2007.

Just 16% of respondents say their company will spend more -- 2 points worse than previously.

A total of 1,802 respondents involved with software purchasing in their company participated in the survey.

"These latest software results -- combined with our recent consumer spending survey - should end the 'are we or aren't we' in economic recession debate once and for all," says Tobin Smith, founder of ChangeWave Research and editor of ChangeWave Investing. "Now both businesses and consumers are singing from the same 'cut-thy-spending' hymnal."

Nearly one-in-10 respondents (9%) cite "a general slowdown in business conditions and capital budgets" as the foremost factor driving their companies purchasing decisions -- a number that is up 3 points since October 2007 and triple the percentage of a year ago.

In a follow-up question, respondents were asked if there had been any adjustments made to their first quarter capital budgets over the past 90 days.

Twice as many said their capital budgets were adjusted lower (22%) than said they were increased (11%) -- a powerful indicator of a very tough corporate spending environment.

The survey also looked at specific software categories and found Security Software (16%; down 7-pts) to have experienced the biggest slowdown since October 2007. Business Intelligence (8%; down 2-pts) and Document/Content Management (5%; down 2-pts) software also look softer.

On a somewhat brighter note, Virtualization (9%) and Enterprise Resource Planning (7%) spending appear similar to that of the previous survey.

But overall, the survey results show clear signs of a recession in business spending for the first quarter of 2008, and are a striking confirmation that we're now sailing through a period of heavy economic turbulence.

  • 2 Contributors
  • 1 Reply
  • 206 Views
  • 2 Months Discussion Span
  • Latest Post Latest Post by patelmiteshb

Dani AI

Generated

As noted, this ChangeWave snapshot arrived at the start of the wider economic contraction — the National Bureau of Economic Research dates the U.S. downturn to December 2007 through June 2009. Treat short‑horizon procurement surveys as directional: they reveal near‑term sentiment but can exaggerate short spikes or mask sector differences. (nber.org)

Two important gaps the thread doesn’t unpack: sample and category nuance, and the capex→opex shift many firms use in a squeeze. Some lines of software spending historically hold up (security and continuity tools) and others become candidates for deferral. Industry coverage at the time flagged virtualization as a practical efficiency play, and analyst work showed security software remained a spending priority even during the downturn. (helpnetsecurity.com)

Practical, low‑friction steps IT/finance teams can take right away:

  • Run a rapid SAM discovery to find unused licenses and imminent renewals.
  • Reprioritize the project backlog: protect revenue‑critical and compliance work; defer low‑ROI initiatives.
  • Launch small virtualization/consolidation pilots for quick infrastructure and energy savings.
  • Renegotiate maintenance terms, consider subscription timing to ease cash flow.
  • Maintain baseline security (patching, logging, endpoint controls) to avoid outsized downstream risk.

A focused SAM/license optimization program and vendor renegotiation are common early wins in a budget squeeze. Analyst work has shown mature license‑optimization practices can produce substantial, near‑term savings. (tiinside.com.br)

Context matters: while ’s skepticism reflects how easy it is to shrug off a single survey, the subsequent months validated that measured, targeted action — protect the essentials, optimize the rest — separated the organizations that recovered faster from those that didn’t. ()

Member Avatar for patelmiteshb

ya this is good joke

Be a part of the DaniWeb community

We're a friendly, industry-focused community of developers, IT pros, digital marketers, and technology enthusiasts meeting, networking, learning, and sharing knowledge.