ChangeWave Research: Corporate Software Purchasing Trends
ChangeWave Research Report:
Corporate Software PurchasingTrends
Spending is Sluggish – Vista Adoption Moves at Snail's Pace
Overview: This report presents the latest ChangeWave Alliance survey results on corporate software spending. The survey was conducted July 26-31, 2007, and a total of 1,601 members involved with IT spending in their organization participated.
Bottom Line: For the second consecutive survey, we’re seeing a slowdown in the corporate software spending growth rate.Only 18% of respondents say their company plans to spend more on software in the next 90 days, a 4-pt decline since our April survey. Moreover, 14% say they’ll spend less, 4-pts worse than previously.
We note that the slower pace may well be due to the summer season, as the current results are in-line with the spending growth rate from a year ago (July 2006).
Next, we examined two key drivers of the software purchasing decision:
Key Drivers of the Software Purchasing Decision / CurrentSurvey
Jul ‘07 / Previous
Survey
Apr ‘07 / Previous
Survey
Jan ‘07 / Previous
Survey
Oct ‘06 / Previous
Survey
Jul ‘06
We currently do not need to purchase any new software / 29% / 14% / 11% / 12% / 16%
Existing software is getting outdated and must be replaced / 23% / 37% / 35% / 34% / 34%
In asign of slower software spending, a very highpercentage of respondents (29%; up 15-pts) say their companycurrently does not need to purchase any new software.This represents a two-fold increase on this key issue since our previous survey in April.
Secondly,only 23% cite software is gettingoutdated and must be replacedas a key driver for their company – down 14-pts from previously.
All told, the current ChangeWave survey findings point to a sluggish corporate software purchasing environment.
Still No Rush to Adopt Vista
Similar to what we found in our previous April survey, there is still no great rush in the corporate world to adopt Vista.Most importantly, 62% of respondents say their company has no plans to upgrade to Vista – only 1-pt less than previously.
Corporate Spending Plans forMicrosoft's Vista / Current
Survey
Jul ‘07 / Previous
Survey
Apr ‘07 / Previous
Survey
Jan ‘07
We Currently Have No Plans to Upgrade to Vista / 62% / 63% / 50%
We are Currently Working on a Vista Upgrade Plan / 14% / 13% / 18%
We Have an Informal/Tentative Vista Upgrade Plan / 12% / 14% / 18%
We Have a Formal Vista Upgrade Plan in Place / 3% / 3% / 4%
Our Vista Upgrade is Complete / 1% / N/A / N/A
Furthermore, just15% report their company has anupgrade plan in place – down 2-pts from previously.
As for the extent of PC installs, a total of 28% say their company has some computers with Vista already installed – a 3-pt uptick from April.
Future PC Purchasing Plans. When we asked Alliance members about future purchasing plans for the next 90 days, Vista is still lagging.
Corporate PC Purchasing PlansFor The Next 90 Days / Current
Survey
Jul ‘07 / Previous
Survey
Apr ‘07
We will not be purchasing any computers
over the next 90 days / 36% / 33%
We will be purchasing 1 or more computers
with Vista installed / 17% / 17%
We will be purchasing 1 or more computers
with Windows XP installed / 38% / 36%
The survey findings still show a better than two-to-one preference for computers installed with Windows XP (38%) rather than Vista (17%) – almost unchanged since April.
Moreover, among companies that have not yet purchased Vista installed computers, only one-in-ten (9%) expect to buytheir first Vista installed computer before the end of 2007.
IT Security Software Spending. A total of 17% say their company’s spending on IT security will increase over the next 90 days, and only 3% say decrease.
In terms of specific categories,Backup/Recovery Software (Change in Net Difference Score = +2) and Disaster Recovery Software/Services (+2) are experiencing the biggest gains since our previous January survey. On the downside, Spam Filtering Software (-10), Anti-Spyware Software (-8) and Anti-Virus Software (-5) show the biggest momentum loss.
Vista Impact on IT Security.Vista’s threatin the IT security space is showing a further decline. Only 19% now say it’s Very or Somewhat Likely that when their company upgrades they’ll rely primarily on Vista for security protection – a 6-pt drop from April. Moreover, only 13% say spending on other types of non-Microsoft security will Decrease once they upgrade to Vista, also 6-pts worse than previously.
Summary of Key Findings
The ChangeWave Allianceis a group of 11,000 highly qualified business, technology, and medical professionals in leading companies of select industries—credentialed professionals who spend their everyday lives working on the frontline of technological change. ChangeWave surveys its Alliance members on a range of business and investment research and intelligence topics, collects feedback from them electronically, and converts the information into proprietary quantitative and qualitative reports.
Helping You Profit From A Rapidly Changing World ™
Table of Contents
Summary of Key Findings...... 2
The Findings...... 5
(A) Corporate Software Purchasing Trends ...... 5
(B) Microsoft Vista ...... 7
(C) IT Software SecurityPurchasing...... 10
(D) Company Trends in Specific Types of Software/Services...... 13
ChangeWave Research Methodology...... 16
About ChangeWave Research...... 17
I. The Findings
Introduction
This report presents the latest ChangeWave Alliance survey results on corporate software spending. The survey was conducted July26-31, 2007.
Total Respondents (n = 1,601)
(A) Corporate Software Purchasing Trends
(1) Question Asked:How would you characterize your company's spending plans for software over the next 90 days compared to the previous 90 days?(n=1,599)
Current SurveyJul ‘07 / Previous
Survey
Apr ‘07 / Previous
Survey
Jan ‘07 / Previous
Survey
Oct ‘06 / Previous
Survey
Jul ‘06 / Previous
Survey Apr ‘06
We are planning to spend more for software compared to previous 90 days / 18% / 22% / 26% / 17% / 18% / 27%
We are planning to spend less for software compared to previous 90 days / 14% / 10% / 9% / 15% / 15% / 7%
There has been no change in spending plans for software compared toprevious 90 days / 60% / 54% / 54% / 58% / 54% / 51%
Don't Know / 7% / 13% / 10% / 10% / 13% / 13%
Other / 1% / 0% / 1% / 0% / 1% / 0%
Slower Spending Growth Rate. For the second consecutive survey, we’re seeing a slowdown in the corporate software spending growth rate – only 18% of respondents say their company plans to spend more on software in the next 90 days, a 4-pt decline since our April survey. Moreover, 14% say they’ll spend less, 4-pts worse than previously.
We note that the slower pace may well be due to the summer season, as the current results are in-line with the spending growth rate from a year ago (July 2006).
(2) Question Asked:Looking at the following areas, which one is most driving your software purchasing decisions?(n=1,567)
CurrentSurvey
Jul ‘07 / Previous
Survey
Apr ‘07 / Previous
Survey
Jan ‘07 / Previous
Survey
Oct ‘06 / Previous
Survey
Jul ‘06 / Previous
Survey Apr ‘06
We currently do not need to purchase any new software / 29% / 14% / 11% / 12% / 16% / 12%
Existing software is getting outdated and must be replaced / 23% / 37% / 35% / 34% / 34% / 31%
Enhancing our ability to innovate and develop new products and services / 14% / N/A / N/A / N/A / N/A / N/A
A general improvement in business conditions and capital budgets / 7% / 13% / 14% / 13% / 12% / 20%
New software capabilities are accelerating the replacement cycle / 7% / 12% / 14% / 14% / 14% / 13%
Improved customer service / 5% / 8% / 10% / 10% / 6% / 7%
General slowdown in business conditions and capital budgets / 5% / 4% / 3% / 5% / 6% / 3%
We are waiting for new technology enhancements before purchasing new software / 4% / 4% / 4% / 5% / 4% / 6%
New software is easier to use / 2% / 3% / 4% / 4% / 4% / 4%
Other / 4% / 4% / 5% / 4% / 4% / 4%
Forces Driving Purchasing Decisions. In asign of slower software spending, a very highpercentage of respondents (29%; up 15-pts) say their companycurrently does not need to purchase any new software. This represents a two-fold increase on this key issue since our previous survey in April.
Secondly,only 23% cite software is gettingoutdated and must be replaced as a key driver for their company – down 14-pts from previously.
(3) Question Asked:Which of the following types of software will your company be purchasing over the next 90 days?(Check All That Apply)(n=1,601)
Security Software / 20%Data Storage and Management / 20%
Business Intelligence/Reporting and Analytics (BI) / 9%
Customer Relationship Management (CRM) / 8%
Enterprise Resource Planning (ERP) / 7%
Document and Enterprise Content Management (ECM) / 7%
Virtualization / 7%
No Plans to Purchase Software in Next 90 Days / 36%
Don't Know / 13%
Other / 7%
Software Categories. Security Software (20%) and Data Storage and Management (20%) are the top categories of software that respondents say their companies are buying in the next 90 days. Again we see evidence of tighter spending – more than a third (36%) say they have No Plans to Purchase Software in Next 90 Days.
(4) Question Asked:Focusing on your company's overall software purchasing, can you think of a new software demand within your enterprise that you find surprising (i.e., something above and beyond the ordinary)? (Open-ended) (n=83)
Data Storage and Management Software/Tools / 13%Enhanced Communication Networking Tools / 11%
Virtualization / 8%
Adoption of Other Operating Systems / 8%
Preference for Non-Vista Operating System / 7%
Security Software/Tools / 6%
Business Process Software / 4%
Oracle Software/Implementation / 4%
SAP Software/Implementation / 4%
Maps Software / 2%
Other Types of New Software / 12%
Other / 22%
When asked to name a surprising new software demand within their company, 13% cited Data Management and Storage Software/Tools , and 11% mentioned Enhanced Communication & Networking Tools.
(B) Microsoft Vista
(5) Question Asked: Which of the following statements best describes your company's Vista upgrade plan?(n=809)
CurrentSurvey
Jul ‘07 / Previous
Survey
Apr ‘07 / Previous
Survey
Jan ‘07
We Currently Have No Plans to Upgrade to Vista / 62% / 63% / 50%
We are Currently Working on a Vista Upgrade Plan / 14% / 13% / 18%
We Have an Informal/Tentative Vista Upgrade Plan / 12% / 14% / 18%
We Have a Formal Vista Upgrade Plan in Place / 3% / 3% / 4%
Our Vista Upgrade is Complete / 1% / N/A / N/A
Don't Know / 6% / 5% / 9%
Still No Rush to Adopt Vista.Similar to what we found in aprevious survey in April, there is still no great rush in the corporate world to adopt Vista.Most importantly, 62% of respondents say their company has no plans to upgrade to Vista – only 1-point less than previously.
Furthermore, just15% report their company has anupgrade plan in place – down 2-points from previously.
(6) Question Asked: Will the release of Vista Service Pack 1 make your company more likely to adopt Vista, less likely, or will it have no effect? (n=809)
CurrentSurvey
Jul ‘07 / Previous
Survey
Apr ‘07
More Likely to Adopt Vista / 22% / 22%
Less Likely to Adopt Vista / 2% / 2%
No Effect / 63% / 62%
Don't Know / 12% / 13%
Vista Service Pack 1. Better than one-in-five (22%) say the release of Vista Service Pack 1 makes their company More Likely to adopt Vista, compared with only 2% saying Less Likely, but this isunchanged from April.
(7) Question Asked:What percentage of your company's total computers have Vistacurrently installed? (n=809)
CurrentSurvey
Jul ‘07 / Previous
Survey
Apr ‘07 / Previous
Survey
Jan ‘07
None / 64% / 68% / 77%
1-10% / 22% / 21% / 13%
11-20% / 2% / 2% / 0%
21-30% / 2% / 1% / 0%
31-40% / 1% / 1% / 0%
41-50% / 1% / 0% / 0%
51-60% / 0% / 0% / 0%
61-70% / 0% / 0% / 0%
71-80% / 0% / 0% / 0%
81-90% / 0% / 0% / 0%
91-100% / 0% / 0% / 0%
Don't Know / 6% / 8% / 8%
(7A) Question Asked:What about a year from now? What percentage of your company's total computers do you estimate will have Vista installed one year from today? (n=809)
None / 22%1-10% / 18%
11-20% / 11%
21-30% / 8%
31-40% / 4%
41-50% / 4%
51-60% / 2%
61-70% / 1%
71-80% / 2%
81-90% / 1%
91-100% / 3%
Don't Know / 21%
Vista PC Installs. As for the extent of PC installs, a total of 28% say their company has some computers with Vista already installed – a 3-pt uptick from April.
Looking ahead, better than half (54%) expect to have Vista installed on some of their company’s computers a year from now.
(8) Question Asked:Which of the following statements best describes your company's computer purchasing plans over the next 90 days?(Check All That Apply)(n=809)
CurrentSurvey
Jul ‘07 / Previous
Survey
Apr ‘07
We will not be purchasing any computers over the next 90 days / 36% / 33%
We will be purchasing 1 or more computers with Vista installed / 17% / 17%
We will be purchasing 1 or more computers with Windows XP installed / 38% / 36%
We will be purchasing 1 or more computers with Mac OS installed / 4% / N/A
We will be purchasing 1 or more computers with Linux installed / 7% / N/A
We will be purchasing 1 or more computers with some other OS installed / 4% / 7%
Don't Know / 9% / 12%
Future PC Purchasing Plans. When we asked Alliance members about future purchasing plans for the next 90 days, Vista is still lagging. The survey findings still show a better than two-to-one preference for computers installed with Windows XP (38%) rather than Vista (17%) – almost unchanged since April.
(9)(FOR THOSE COMPANIES THAT HAVE NOT ALREADY PURCHASED VISTA INSTALLED COMPUTERS) In which quarter do you think your company will purchase its first computer with Vista already installed?(n=565)
3Q 2007 / 2%4Q 2007 / 7%
1Q 2008 / 10%
2Q 2008 / 9%
3Q 2008 or Later / 22%
Will Not Upgrade to Vista / 21%
Don't Know / 25%
No Answer / 5%
Timing of First Vista Installed PC Purchases. Among companies that have not yet purchased Vista installed computers, only one-in-ten (9%) expect to buytheir first Vista installed computer before the end of 2007.
(C) IT Software SecurityPurchasing
(10) Question Asked:Over the next 90 days, do you think your company's spending on IT security will increase, decrease, or remain the same compared to the previous days?(n=534)
Increase Over Next 90 Days / 17%Decrease Over Next 90 Days / 3%
Remain the Same / 73%
Don't Know / 7%
IT Security Software Spending. A total of 17% say their company’s spending on IT security will increase over the next 90 days, and only 3% say decrease.
(10A) Question Asked:Where are you seeing the greatest increases in IT security spending within your company?(Check All That Apply)(n=468)
Current Survey Jul ‘07 / PreviousSurvey
Jan ‘07 / Previous
Survey
Oct ‘06 / Previous
Survey
Jul ‘06 / Previous
Survey Apr ‘06
Backup/Recovery Software / 41% / 39% / 41% / 37% / 38%
Disaster Recovery Software/Services / 22% / 20% / 20% / 21% / 22%
Enterprise/Network Security Software / 31% / 29% / 31% / 36% / 36%
Authentication and Identification Software / 25% / 23% / 26% / 28% / 28%
Anti-Virus Software / 36% / 40% / 43% / 46% / 48%
Anti-Spyware Software / 28% / 32% / 36% / 36% / 41%
Spam Filtering Software / 25% / 32% / 32% / 32% / 34%
Other Security / 2% / 4% / 4% / 3% / 2%
(10B) Question Asked:And where are you seeing the smallest increases (or no increase) in IT security spending within your company?(Check All That Apply)(n=468)
CurrentSurvey
Jul ‘07 / Previous
Survey
Jan ‘07 / Previous
Survey
Oct ‘06 / Previous
Survey
Jul ‘06 / Previous
Survey
Apr ‘06
Backup/Recovery Software / 25% / 25% / 21% / 25% / 29%
Disaster Recovery Software/Services / 26% / 26% / 24% / 24% / 27%
Enterprise/Network Security Software / 15% / 14% / 14% / 14% / 16%
Authentication and Identification Software / 24% / 23% / 21% / 20% / 22%
Anti-Virus Software / 19% / 18% / 21% / 20% / 16%
Anti-Spyware Software / 21% / 17% / 20% / 18% / 14%
Spam Filtering Software / 25% / 22% / 24% / 24% / 21%
Other Security / 2% / 1% / 3% / 2% / 1%
IT Security Spending Increase vs. Decrease – Current Survey (July 2007)
GreatestIncreases / Smallest
Increases / Net
Difference
Score
Backup/Recovery Software / 41% / 25% / +16
Disaster Recovery Software/Services / 22% / 26% / -4
Enterprise/Network Security Software / 31% / 15% / +16
Authentication and Identification Software / 25% / 24% / +1
Anti-Virus Software / 36% / 19% / +17
Anti-Spyware Software / 28% / 21% / +7
Spam Filtering Software / 25% / 25% / 0
Change in Net Difference Score: IT Security Spending Increase vs. Decrease – Current Survey (July 2007) vs. Previous Survey (January 2007)
Current Survey NetDifference Score
(Jul ’07) / Previous Survey Net
Difference Score (Jan ’07) / Change
In Net
Difference
Score
Backup/Recovery Software / +16 / +14 / +2
Disaster Recovery Software/Services / -4 / -6 / +2
Enterprise/Network Security Software / +16 / +15 / +1
Authentication and Identification Software / +1 / 0 / +1
Anti-Virus Software / +17 / +22 / -5
Anti-Spyware Software / +7 / +15 / -8
Spam Filtering Software / 0 / +10 / -10
Best and Worst Areas of IT Security Spending.In terms of specific categories,Backup/Recovery Software (Change in Net Difference Score = +2) and Disaster Recovery Software/Services (+2) are experiencing the biggest gains since our previous January survey. On the downside, Spam Filtering Software (-10), Anti-Spyware Software (-8) and Anti-Virus Software (-5) show the biggest momentum loss.
(11) Question Asked:Microsoft claims that Vista contains built-in protection from viruses, spyware, and malware. If and when your company upgrades to Vista, how likely is it that you will rely primarily on Vista for protection from viruses, spyware, and malware?(n=809)
CurrentSurvey
Jul ‘07 / Previous
Survey
Apr ‘07 / Previous
Survey
Jan ‘07 / Previous
Survey
Oct ‘06
Very Likely / 4% / 6% / 8% / 8%
Somewhat Likely / 15% / 19% / 19% / 19%
Unlikely / 54% / 54% / 49% / 48%
Will Not Upgrade to Vista / 13% / 8% / 8% / 9%
Don't Know / 13% / 13% / 16% / 15%
(11A) Question Asked:If and when your company upgrades to Vista, do you think your company's spending on other non-Microsoft security software (such as McAfee or Symantec software) will increase, decrease or will there be no change?(n=809)
CurrentSurvey
Jul ‘07 / Previous
Survey
Apr ‘07 / Previous
Survey
Jan ‘07 / Previous
Survey
Oct ‘06
Increase in Other Security Software Spending / 4% / 5% / 5% / 5%
Decrease in Other Security Software Spending / 13% / 19% / 22% / 21%
No Change in Other Security Software Spending / 54% / 51% / 47% / 47%
Will Not Upgrade to Vista / 12% / 10% / 8% / 8%
Don't Know / 15% / 16% / 19% / 20%
Vista Impact on IT Security.Vista’s threat in the IT security space is showing a further decline. Only 19% now say it’s Very or Somewhat Likely that when their company upgrades they’ll rely primarily on Vista for security protection – a 6-pt drop from April. Moreover, only 13% say spending on other types of non-Microsoft security will Decrease once they upgrade to Vista, also 6-pts worse than previously.
(D) Company Trends in Specific Types of Software/Services
We asked respondents to identify the vendors their company uses to buy specific types of software and services. Here are the top companies:
- Customer Relationship Management (CRM): Oracle (26%), SalesForce.com (19%), SAP (19%), Microsoft (16%)
- Enterprise Resource Planning (ERP):SAP (46%),Oracle (30%)
- Business Intelligence/Reporting and Analytics (BI):Microsoft (34%), Business Objects (28%), Oracle (28%), SAP (26%)
In future surveys we’ll continue to track purchasing trends within these and other software areas, so we can identify the vendors gaining and losing market share.
Below are the complete survey results on company purchases for each of these software areas.
Customer Relationship Management (CRM) Software
Respondents Working in a Company that Currently Uses Any Type of Customer Relationship Management (CRM) software or services (n=230)
(12) Question Asked:Which of the following CRM vendors does your company/ organization currently use?(Check All That Apply)
Oracle (incl. Siebel) / 26%SalesForce.com / 19%
SAP / 19%
Microsoft / 16%
Amdocs / 4%
Sage Software / 3%
Astea / 1%
Epicor / 1%
Netsuite / 1%
CDC Corp / 1%
Proprietary/Internally DevelopedCRM Software / 20%
Don't Know / 5%
Other / 17%
Enterprise Resource Planning (ERP) Software
Respondents Working in a Company that Currently Uses Any Type of Enterprise Resource Planning (ERP) software or services (n=201)
(13) Question Asked:Which of the following ERP vendors does your company/ organization currently use? (Check All That Apply)
SAP / 46%Oracle / 30%
Microsoft / 14%
Sage Software / 4%
Lawson Software / 2%
SSA Global / 2%
Epicor / 1%
Infor Global Solutions / 1%
QAD / 1%
Proprietary/Internally DevelopedERP Software / 16%
Don't Know / 3%
Other / 10%
Business Intelligence/Reporting and Analytics (BI) Software
Respondents Working in a Company that Currently Uses Any Type of Business Intelligence/Reporting and Analytics (BI) software (n=210)