VAR 500 Survey: IT Spending Outlook Dims

By Bonnie Markowitz

3:10 PM EST Mon. Dec. 09, 2002
From the December 09, 2002 issue of VARBusiness

Results of our Q3 Survey of 80 executives from the VARBusiness 500, our annual ranking of North America's largest solution providers. For more analyis, see, VAR500: IT Spending Outlook Dims

Questions	Q1 Results	Q3 Results
Which best describes your position/job function?
CEO/President	0	36.30%
Other CxO-level exec (please specify)<specify>	0	15.00%
Other Executive management (SVP, VP)	0	22.50%
Corporate management (Financial, Admin, Operations, Purchasing)	0	2.50%
Technical management	0	5.00%
Marketing management	0	18.80%
In the past 3 months, has you company's revenue generally been...
In line with expectations	41.70%	51.20%
Below expectations	31.70%	33.80%
Ahead of expectations	26.70%	15.00%
In comparison to last quarter , do you believe your next quarter revenue will be:
Ahead of last quarter	60.00%	52.50%
Below last quarter	23.30%	8.70%
Flat (no growth)	16.70%	38.80%
Which of the following do you sell?
PC (desktops, portables)	0	62.50%
Hardware Platforms	81.70%	83.80%
Storage and Database Management Software	73.30%	77.50%
Security and Privacy Technologies	70.00%	77.50%
Enterprise Management Software	63.30%	78.80%
Internet Platforms	61.70%	71.30%
Wireless and Mobile Technologies	53.30%	68.80%
Voice and Data Networking	48.30%	68.80%
Application integration software & middleware	0.00%	77.50%
None of the above	3.30%	3.80%
Q3 PC (desktops, portables) sales this quarter relative to expectations are:
In line with expectations	0	60.00%
Ahead of expectations	0	14.00%
Below expectations	0	26.00%
Hardware Platforms sales this quarter relative to expectations are…
In line with expectations	53.10%	52.30%
Ahead of expectations	24.50%	14.90%
Below expectations	22.40%	32.80%
Internet Platforms sales this quarter relative to expectations are...
In line with expectations	51.40%	59.70%
Below expectations	27.00%	33.30%
Ahead of expectations	21.60%	7.00%
Storage and database management sales this quarter relative to expectations are...
In line with expectations	50.00%	48.40%
Ahead of expectations	27.30%	19.30%
Below expectations	22.70%	32.30%
Enterprise management software sales this quarter relative to expectations are...
In line with expectations	60.50%	49.20%
Below expectations	21.10%	38.10%
Ahead of expectations	18.40%	12.70%
Voice and data networking sales this quarter relative to expectations are...
Ahead of expectations	41.40%	14.60%
In line with expectations	37.90%	45.40%
Below expectations	20.70%	40.00%
Security and Privacy sales this quarter relative to expectations are...
Ahead of expectations	52.40%	22.60%
In line with expectations	42.90%	58.00%
Below expectations	4.80%	19.40%
Wireless and Mobile sales this quarter relative to expectations are...
Ahead of expectations	28.10%	20.00%
In line with expectations	50.00%	56.40%
Below expectations	21.90%	23.60%
Application integration software and middleware sales this quarter relative to expectations are...
Ahead of expectations	0	16.10%
In line with expectations	0	58.10%
Below expectations	0	25.80%
By what percent do you expect your average customer's IT investment to change in the next three months?
Improve greatly	0	1.20%
Improve by 10 to 25%	28.30%	0
Improve by less than 10%	41.70%	0
Improve somewhat	70.00%	43.80%
Stay the same	23.30%	48.80%
Decrease by less than 10%	5.00%	0.00%
Decrease by 10 to 25%	1.70%	0.00%
Decrease somewhat	6.70%	6.20%
Decrease greatly	0	0.00%
In the past 3 months, has your company's overall gross profit margin been...
Ahead of expectations	25.00%	12.50%
In line with expectations	58.30%	60.00%
Below expectations	16.70%	27.50%
How have your company's operating margins changed in the past 3 months?
Improve greatly	3.30%	5.00%
Improved by 10 to 25%	15.00%	0
Improved by less than 10%	18.30%	0
Improve somewhat	33.30%	23.80%
Stayed the same	41.70%	47.50%
Decreased by less than 10%	11.70%	0.00%
Decreased by 10 to 25%	6.70%	0.00%
Decrease somewhat	18.30%	21.20%
Decrease greatly	3.30%	2.50%
How do you expect your company's operating margins to change in the next 3 months?
Improve	50.00%	36.30%
Stay the same	40.00%	57.50%
Decrease	10.00%	6.20%
What percent of your employee's utilization is billable? (Employee Utilization Rate)
Greater than 75%	10.00%	30.00%
61 to 75%	30.00%	33.80%
51 to 60%	20.00%	25.00%
41 to 50%	18.30%	11.20%
31 to 40%	3.30%	0.00%
21 to 30%	10.00%	0.00%
11 to 20%	0.00%	0.00%
10% or less	8.30%	0.00%
How have employee utilization rates changed in the past 3 months?
Increased	0	31.20%
Stayed the same	0	57.50%
Decreased	0	11.20%
How do you expect your employee utilization rates to change in the next 3 months?
Improve	58.30%	48.80%
Stay the same	41.70%	45.00%
Decrease	0.00%	6.20%
Describe your company's staffing plans for the balance of 2002?
Will increase hiring	41.70%	28.80%
Will stay the same	48.30%	61.20%
Will have to reduce workforce	10.00%	10.00%
Describe your company's staffing plans for 2003.
Will increase hiring	0	65.00%
Will stay the same	0	30.00%
Will have to reduce workforce	0	5.00%

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