Storage Soup

Dec 18 2008   10:24AM GMT

Storage spending slowing already

Dave Raffo Dave Raffo Profile: Dave Raffo

The spending slowdown most storage industry people are expecting to hit in 2009 has already begun, according to new research from TheInfoPro (TIP).

TIP interviewed 65 senior executives at large Fortune 1000 companies and government agencies, and found nearly one-third spent less on storage this year than they originally budgeted and 68% plan to spend less in 2009 than in 2008. A year ago, TIP’s survey found 81% of enterprises expected to spend more this year than they did last year.

The fourth quarter is usually a big one for buying storage, as companies spend their remaining budget and often find pricing favorable as vendors want to finish the year strong. But that apparently isn’t the case this year.

“We’re seeing a lot less Q4 activity this year,” TIP CEO Ken Male said. “We’re not seeing a lot of budget flush right now. It’s a very defensive procure right now.”

According to TIP, only 21% of the execs interviewed expect to spend more than $10 million in 2009 – a 10% drop from last year. The averaged 2008 spend was $10.7 million and the average 2009 budget will decrease 14% over the amount spent this year.

Male says many enterprises will make use of storage they bough in recent years and early n 2008, before what he calls the “nuclear winter” hit the financial services in September.

The spending slowdown isn’t limited to financial services. Breaking it down by industry, 75% of technology companies, 68% of financial services firms and 63% of manufacturers forecast significant declines in 2009 spending.

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