CRN Research: Spending Priority Level At New High

According to CRN's Business Spending Survey in June--which polled 125 technology executives at companies with at least 1,000 employees--hardware, software and Web-based development were all rated as high priorities.

Seventeen of 19 categories CRN tracks on a regular basis showed an increase in the level of spending priority in June vs. March.

Some solution providers say they are seeing more strength in enterprise than in small and midsize firms. "It's like a tale of two cities," said Dennis Hunter, owner of Missouri Information Solutions, a Kansas City, Mo.-based solution provider. "The enterprise customers are doing serious upgrades--server consolidation, blade servers, Itaniums. It's really happening in the large enterprise."

But, he said, that doesn't mean smaller accounts are not gearing up. "I think it's going to trickle down to the smaller business down the road--three to six months along," Hunter said.

CRN's monthly survey of channel executives, likewise, found near-term optimism at all-time highs for notebook sales and PC servers. Those numbers suggest, as Intel President Paul Otellini told financial analysts last week, that the corporate upgrade cycle for IT continues unabated.

The survey numbers seem to point to a continued, robust IT market. Despite revenue numbers that fell short of Wall Street expectations, Intel last week said second-quarter sales grew 18 percent compared with second-quarter 2003, while profit jumped 96 percent. Rival Advanced Micro Devices said it had almost doubled its second-quarter revenue over the same period in 2003, while turning a year-ago loss into a profit.

In the software space, some solution providers are mixed on whether more growth will be seen in the higher-end enterprises or in smaller accounts--but it appears growth continues nonetheless.

Srini Voruganti, vice president of infrastructure solution provider Pegasus Knowledge Solutions, Schaumburg, Ill., said business is up 17 percent this quarter. "Now it's the businesspeople who are saying, 'This is the functionality I want and this is what I'm willing to spend,' " he said.

ROCHELLE GARNER contributed to this story.