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By Mark Henricks
Cash-strapped local governments and financing-challenged small businesses seem unlikely candidates to lead IT spending out of the recession. But that’s the picture painted by the latest CDW IT Monitor, which found strong growth in government IT spending plans and small businesses remaining more optimistic than usual.
The November edition of the bi-monthly poll reported that 84 percent of local government IT decision makers plan to replace or install hardware in the next six months. That was up 14 percentage points since the last survey in August. The CDW IT Monitor data is drawn from a poll of 1,079 IT decision makers that was conducted between October 1 and October 8, 2010. IT vendor CDW sponsors the survey.
Another highlight was the response by all government IT decision makers -- local, state and federal -- when asked about their software spending plans. Eighty-six percent answered in the affirmative. That was up 9 percentage points since August survey and was the highest since the survey began in 2007.
“Many state and local government IT decision makers appear to be prepared to spend money in order to save money in the long run,” according to CDW President And Chief Operating Officer Thomas E. Richards. Government agencies were willing to invest in newer technologies that promised to allow them to reduce staff and lower costs in key areas such as energy consumption, he said.
The outlook was more muted among small businesses, where 1 in 5 IT decision makers said they would likely replace or install software for a significant part of the organization in the next six months. That was about the same as the last survey. The best news here was that the results marked a record high for small business software purchase plans since the first survey in 2007.
In another positive reading about small business, 39 percent said they anticipated replacing or installing new hardware. That was up 3 percentage points since August and marked the second straight gain for the measure since June, when it bottomed for the year at 34 percent.
Richards said overall higher confidence among small businesses accounted for some of their resilience. “Developments such as the recent passage of the Small Business Jobs Act of 2010, with its tax benefits and lending provisions, could also be contributing to this stabilizing effect,” he said.
While government and small business seemed ready to open their checkbooks, the overall IT outlook remained mixed. The index’s Growth Monitor, which measures IT investment expectations, held steady at 72 for the sixth consecutive reading.
And improvements at state and federal government spending plans lagged those at local governments. While the federal IT Growth Monitor index was at a relatively high 73, for instance, that was that was up just 2 points since August, and was down from 75 in July. State government recorded a Growth Monitor reading of 65, up slightly from 62 in August.
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