Spending up, priorities shifting, CIO survey says

Network spending is in good shape, but Gigabit Ethernet and data networking in general aren’t top spending priorities among CIOs, according to last month’s IT Spending Survey by Goldman Sachs.

The financial services firm regularly polls 100 IT execs from Fortune 1000 companies. In February, 90 of them indicated that overall network spending would be flat or up in the first half of this year compared to the second half of 2003. In fact, six indicated budget increases of between 21% and 50%.

That certainly ought to bring a warm, fuzzy feeling to network vendors and the industry as a whole.

Goldman Sachs also asked respondents to rank different technologies as having highest, medium or lower priority. The company says the technologies jump from one category to the other fairly easily with every survey, but I will note some key points here.

Data networking equipment and Gigabit Ethernet both fell from highest priority to medium, while VPNs, VoIP equipment and Linux-based servers were among the categories that joined wireless LANs and other technologies as highest priority.

To me, this shows that network equipment in general is in pretty good shape in most organizations, while hot technologies – the type that gets more headlines these days – are foremost on the minds of CIOs.

Goldman Sachs threw in a question about whether the companies plan to deploy Gigabit Ethernet to the desktop in the next 12 months. Three said they had already deployed it, and another 29 said they would this year.

But the remaining 68% said they wouldn’t do it this year. Price wasn’t the main issue, as only 4% of those said they were waiting for equipment costs to come down. No, the main issue, to 72% of those not deploying, was that they simply didn’t need the extra bandwidth.

Of those deploying Gigabit to the desktop this year, 45% cited bandwidth demands, and 38% said they are building new office space and throwing in Gigabit support – in other words, future-proofing, since they’re building out anyway.

Goldman Sachs gathered vendor-specific data, as well – particularly about Cisco – so I’ll get to that next time.