CIO Insight: Virtualization Is Top 2009 Spending Priority

Ann All

Every year, to promote whatever clothing designers have decided is the "it" color of a given season, fashion writers everywhere refer to the designated shade as "the new black." The other day, one of our executives, commenting on a collection of earnings reports, said "Flat is the new up." Catchy. Depressing, but catchy.


The same phrase applies to IT spending. Last month I interviewed Computer Economics' John Longwell about it. Afterward, a colleague asked how it went. My reply: "There are only so many ways to say IT spending is down." If only I'd been clever enough to come up with "the new up." In that interview, as with others I've done in recent months, it's all about trying to find a few bright spots in the mostly gloomy IT spending forecast.


So where are folks spending their shrinking IT budgets? CIO Insight just posted an interesting slideshow illustrating the top IT spending priorities for 2009. You'll wear out your clicking finger to view the 60 slides, each showing the percentage of companies budgeting for a particular technology, the change from 2008 spending levels, change in the average budget and a CIO Insight Growth Score, which was calculated by looking at 2009 budget growth, scaling it to the percentage of companies that spent in 2008, and factoring in the change from 2008 spending.


Not surprisingly, server and storage virtualization will see the strongest growth in 2009. Sixty-two percent of companies are budgeting for it, showing a 5 percent increase from 2008 spending levels, a 16.8 percent uptick in average budgets, and an overall growth score of 14.2. I got a similar take from Lew Smith of management and technology consultancy Interphase Systems, one of several folks I interviewed about IT spending in December. He told me many of his company's clients were looking to further expand the use of virtualization:


They're finding they are getting the efficiency benefits they were sold when they purchased the software, and they want to reap those benefits in the full data center.


With virtualization, it should be fairly easy for CIOs to illustrate the "hard, fast ROI" companies want these days. Virtualization and VoIP were also near the top of the spending priorities list of CIOs surveyed by Robert Half Technology earlier this year. On CIO Insight's list, VoIP got an overall growth score of 8.2, with 40 percent of companies budgeting for it, a 3 percent increase from 2008 spending, and a 13.8 percent jump in average budgets.


Last month I predicted that recent legislation could give business intelligence a boost, since BI software could help provide the spending transparency required of companies accepting stimulus funds. Not sure if that has anything to do with it, but CIO Insight gave BI an overall growth score of 7.6. It's in the budgets of 44 percent of companies, with a 3 percent increase from 2008 spending and an 11 percent in average budgets.


Too many other highlights to note. Warm up your clicking finger and check out the slideshow for yourself.

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Add Comment      Leave a comment on this blog post
Aug 19, 2009 12:32 PM Lew Smith Lew Smith  says:

Hi Ann, thanks for including my quote again! I agree that virtualization showing the strongest growth in 2009 is no surprise. Datacenter consolidation is still a key driver for many organizations who are waiting to implement a virtualization strategy. Rather than expanding the physical facility, they want to utilize those resources efficiently. However, we're seeing another trend (that we predicted) starting to truly take shape. Desktop virtualization is quickly becoming a driving factor in the server and storage virtualization expansion effort.


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