National Monitor
VERNON HILLS, Ill. – May 13, 2008 – Doubts on the momentum and direction of the IT marketplace have spread from small businesses to medium-size firms, according to the latest reading of the CDW IT Monitor, a bimonthly indicator of sentiment in the U.S. IT industry.
The overall CDW IT Monitor index dropped one point to 72, compared to February’s reading of 73. In the medium business segment, the IT Growth Monitor, a sub-index measuring anticipated investment in IT, dropped seven points from February and posted a reading of 70. Additionally, 21 percent of medium-size businesses expect to hire IT staff in the next six months, down 10 percentage points from two months ago.
“There is a hesitancy on the part of IT decision makers to invest heavily in new staff or infrastructure in a volatile economic environment,” said CDW Vice President Mark Gambill, the company’s executive responsible for market insights. “This trend was first noticeable in the small business sector in the previous IT Monitor two months ago, and now the uncertainty is spreading to medium-size businesses.”
The CDW IT Monitor is based on an online survey of at least 1,000 IT decision makers from businesses of all sizes and all sectors of government. Data breakdowns for all corporate and government segments are available at www.cdwitmonitor.com.
The previous CDW IT Monitor in February revealed a definitive gap between the small business sector and medium and large businesses with regard to confidence and prospects for growth. In the small business sector, the IT Growth Monitor registered at 51, compared to 77 for mid-size and 80 for large businesses.
In contrast to the small and medium business sectors, the April IT Growth Monitor for large businesses remained steady at 80.
“In the case of large businesses, many budgets have already been approved, and there is less volatility at the onset of changes in the economy,” said Gambill. “However, if economic conditions continue to weaken, it will be interesting to see how this trend develops as we approach the second half of the year.”
While prospects for growth in IT investment have declined, the value that decision makers place on IT and its role within the organization remained steady. Eighty-two percent of overall IT decision makers (including 88 percent of medium-size businesses) believe that IT is effective in helping to achieve the company’s mission and goals. Additionally, the IT Value Monitor, which measures the perceived value of IT, registered a score of 76—unchanged from the February 2008 IT Monitor.
“Even in the midst of an economic downturn, the perceived value technology brings to an organization stayed strong,” said Gambill. “We’re also seeing a bit of a ‘barbell effect,’ with organizations likely moving forward with projects at each end of the IT spectrum, such as small equipment replacements or large enterprise migrations. While spending on those projects continues, a lot of IT investments that fall in the middle of the spectrum are being put on hold until overall economic conditions improve.”
CDW Monitor Highlights (April 2008)
- Fewer than half (45 percent) of small businesses see IT investment as helping their bottom line, down seven percentage points from December 2007.
- One in five companies (20 percent) report IT problems that disrupted customer needs on at least six days in the last six months, up from 14 percent in December 2007 and 16 percent in February 2008.
- Medium-size businesses registered a four point decline in the overall Monitor reading, from 77 in February 2008 to 73 in April.
- One in six (17 percent) of government organizations expect decreasing IT budgets over the next six months, and eight percent expect to reduce staff.
About the CDW IT Monitor
The CDW IT Monitor was created by CDW Corporation, and research and analysis is conducted by independent polling firm Richard Day Research of Evanston, Ill. Decision makers are invited from two large national panels of IT decision makers built and maintained by E-Rewards and Survey Sampling International. Data reported in this release is based on a survey of 1,060 IT decision makers conducted between March 27 and April 4, 2008.
At the center of the CDW IT Monitor is an index number, which registered an initial benchmark reading of 69 in December 2007. Results are calculated on a scale of 0-100, with 100 indicating the highest level of confidence. Future readings of the CDW IT Monitor will continue to yield comparisons to previous scores, allowing for an interpretation of the direction of sentiment in the IT marketplace. The next CDW IT Monitor will be released in June 2008.
Data are weighted to ensure that CDW IT Monitor calculations closely represent the overall population of corporate and government employers in terms of size, based on the number of employees. Corporate data are weighted according to U.S. Economic Census data, and government data are weighted according to data from the U.S. Census Bureau’s annual survey of government employment. The margin of sampling error for a survey based on this many interviews is approximately +/-4 percentage points for the business sector, and +/-6 percentage points for government.
About CDW
CDW®, ranked No. 39 on Forbes magazine’s list of America’s Largest Private Companies, is a leading provider of technology solutions for business, government and education. CDW is a principal source of technology products and services including top name brands such as Acer, Adobe, APC, Apple, Cisco, EMC, Fujitsu, HP, IBM, Lenovo, Microsoft, Panasonic, Quantum, Samsung, Sony, Symantec, ViewSonic and Xerox.
CDW was founded in 1984 and as of December 31, 2007 employed approximately 6,300 coworkers. In 2007, the company generated sales of $8.1 billion. For more information, visit CDW.com.
