IT Storage Budgets Expected to Take a Hit in 2009

The average consumer isn't the only one spending significantly less these days. The current economic environment has led some of the world's largest companies to tighten their purse strings.

According to a recent study conducted by TheInfoPro — an independent research network for the IT industry — 68 percent of Fortune 1000 companies expect IT storage spending to decrease this year. According to Ken Male, CEO and founder of TheInfoPro, a few factors play into this cautious spending.

“In the beginning of 2008, organizations were buying based on the growth rates they had witnessed in ’07 and ’06,” he explained. “[But] as the economy continued to deteriorate further into ’08, they realized that they had excess capacity. There’s less of a demand; there aren’t as many business applications, new projects. [Additionally,] business units are really starting to tighten their belts because they’re getting the mandate from the top down to be very fiscally responsible.”

However, the evolvement of tiered storage is allowing IT organizations to become more efficient at buying and implementing storage solutions. Previous studies dating back to 2002 and 2003 reveal there was primarily one platform of storage that companies could buy: an expensive, high-end tier-1 type of platform.

“What has happened over the years is you’ve got lower-cost tiers of storage — the big high-density disk drives,” Male said. “Tiered storage evolvement really started to come to the fore in 2005-2006, and now these organizations are becoming much better in how they actually deploy and implement storage so that they’re not spending as much on the high-end storage as they used to.”

Nevertheless, it’s hard to predict what the financial conditions for the IT storage industry will be later in the year, Male said.

“It’s hard to crystal-ball past the first half of 2009 right now. But in talking to [procurement professionals], they’re expecting very defensive spending in the first half of ’09,” he said. “I think there’s wishful thinking that the second half of ’09 is going to get better, but right now they are by a wide margin planning to spend a lot less in ’09 [as a whole].”

– Deanna Hartley, dhartley@certmag.com

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Deanna Hartley

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