Survey Probes Storage Budgets

The worst is over. The cloud has lifted. IT managers are opening their wallets to spend this coming year.

So goes the latest financial scuttlebutt. But results from an online survey conducted for Byte and Switch Insider, this publication's subscription research service, hint that expectations may be a tad high.

The survey, sent out in December to a selected group of enterprise IT customers, shows that 49 percent of respondents think their 2004 network storage budgets will be "about the same" as their 2003 ones. Further, more than half of respondents -- 52 percent -- expect their 2005 network storage budgets to be the same as this year's.

This isn't to say respondents aren't planning to spend more. Roughly 41 percent say their current budgets are higher than last year's; 9 percent said they're lower. Full results will be available later this month.

In a survey of budget plans last year, taken in the midst of the worst downturn in IT history (see B&S Survey: Storage Budgets Up in 2003), a larger percentage of respondents (about 54 percent) told Byte and Switch their budgets for 2003 would be the same as 2002's; 35 said they'd be higher.So what gives? Is that rosy crystal ball dimming?

Not exactly. Many financial experts predict an uptick in spending this year. Some analysts, such as Alex Henderson of Smith Barney, say growth will be up "strongly." In a recent client note, Henderson says a field survey of "enterprise-focused resellers and distributors" indicates the full year 2004 could bring 15 percent to 50 percent growth in IT sales overall.

While not specifically commenting on the storage market, Henderson quotes one of his field sources as saying, "SAN and disaster recovery continue to [be] strong."

But the jury's out on the degree to which storage networking will rise with the rest of IT. There may be a temptation to raise expectations too high, particularly after such a long downturn.

Another analyst thinks it's a safe bet that storage networking will rise with the general IT tide, though he can't say by how much. "Security, SANs, voice over IP, and wireless -- that is, WiFi -- are the highest priorities in terms of enterprise spending budgets," says Shaw Wu of AmTech Research.Bottom line? While predictions on spending levels for IT remain optimistic, caution may be wise in applying the forecasts to storage networking -- at least until there's more evidence of improved sales.

Mary Jander, Site Editor, Byte and Switch