CRN – Computer Reseller News - 18/02/2008

Philip White looks at the results of Syscap's annual finance survey taken from the responses of the channel and end users.

Our annual finance survey seems to grow every year and has often acted as a good indicator of business trends for the months ahead, particularly in terms of budgets and the type of investments both resellers and their customers are likely to make. As with previous surveys, this year's results contained some answers that reinforced our own expectations, as well as some inevitable surprises.

Most positive of all were the figures relating to the use of IT finance in the Professions, a key focus for Syscap, with a positive response from some 83 percent of practices. The majority of those questioned use finance because it enables acquisition without cash outlay and preserves cashflow, and IT was the item most likely to be financed - beating other equipment and company vehicles by a significant margin among every group.

Among IT resellers, there were some interesting predictions about end users' budget allocation. While the majority believed that customer budgets for hardware will remain static in 2008, increases were predicted for software and even more so for services. These results are in line with IDC's Top Ten predictions for the global IT leasing and finance industry, which suggest that global IT spend will be around $1 trillion - the largest score of which (43 percent) will be on services.

These results certainly mirror the trends that we have witnessed throughout 2007, as IT services continue to grow in importance within businesses and therefore have an increasing impact on overall spending. It should be pointed out, however, that among end user groups, the majority of respondents predicted that budget allocations for IT would remain static in all areas: hardware, software and services. So it will be useful to find out who was right in next year's survey.

IDC predicts that overall growth in IT spending will slow from six to around 5.3 percent. However, in our own survey few end users actually agree, despite 42 percent of resellers believing that the credit crunch will affect their customers' spending plans in 2008. In fact, a clear majority of end user respondents said it would have no effect on their spending plans. Perhaps this confidence stems from the acceptance of finance as part and parcel of IT budgeting.