Global Insight // Bringing You the Power of Perspective

Wendover-Global Insight IT Spending Index: IT Spending Hits High in Q4 2005

Haverford, PA, January 25, 2005 -The Wendover-Global Insight IT Spending Index reached a new high in fourth-quarter 2005, climbing 36.3% over the previous quarter over quarter and signaling continued high level of spending and a bright outlook for IT (Figure 1). Year over year, the Index climbed 56.5% (Figure 2).

Survey results for the fourth quarter of 2005 indicated positive quarter-over-quarter growth in many hardware and software categories. In addition, various industries declared their intentions to increase spending on IT products. Prospective spending in accounting and finance software posted strong results, up 27.4% year over year, as firms continue to work towards meeting Sarbanes-Oxley compliance. The finance industry also maintained a high level of prospective spending in efforts to meet the new Federal accounting guidelines. With the SEC- granted extension, these categories are expected to continue to perform well.

In other categories, data management software continued its robust growth, up double-digits for both quarter over quarter and year over year. Likewise, network equipment and network services have experienced strong spending prospects for some time and should continue to see expansion. Enterprise resource planning and manufacturing software enjoyed modest growth from the third quarter, but purchasing software suffered from declines from the previous quarter and also year over year. Firewall protection and disaster recovery software encountered some upward movement in spending expectations and can expect to see more of the same.

The Wendover-Global Insight IT Spending Index measures the intentions of IT decision makers to invest in new capital projects, typically purchases that will close in the next six to nine months. Wendover Corporation completes 133,000 surveys annually with IT decision makers at 80,000 of the largest corporations throughout the United States and the United Kingdom, including every Fortune 500 corporation.

The overall Index is pegged at 100 points in fourth-quarter 1999, while the spending category and industry indices are based to 100 in second-quarter 2001. Surveys conducted since then have generated 25 quarters of historical data. The IT Spending Index is published monthly through a partnership of the two companies, Wendover Corporation and Global Insight, Inc.

Wendover-Global Insight IT Spending Index - Q4 2005

Industry Outlook -

Operations software spending climbed 48% in the fourth quarter and was up more than 100% year over year, while manufacturing software spending grew 42% in the third quarter and 71% year over year (Figure 3).
Both e-commerce and Internet/Intranet services witnessed strong growth during the fourth quarter, 36% and 63% respectively, but only the former enjoyed large gains over the same period in the previous year—67%—while the latter added less than 10% (Figure 4).
The education and social services and government (public administration) sectors have been investing heavily in IT recently, up 44% and 21% from the previous quarter. However, while education and social services were 61% higher than the fourth quarter last year, government (public administration) saw declines of 2% from that same period (Figure 5).
The finance industry IT spending has endured a prolonged period in the doldrums, down 6% since last year at this time and recorded double-digit declines from last quarter. On the other hand, the insurance industry has been one of the fastest growing spenders in IT lately, having posted gains of 33% since this period last year and more than 100% quarter over quarter (Figure 6).

In addition to distributing the IT Spending Index to the public at no cost, Wendover Corporation provides research clients with more segmented analysis from the same database. Global Insight provides its clients with broader market analysis that incorporates the IT spending data along with other business intelligence and market projections.

Note:
An Index analysis, FAQs about the survey methodology and the Index, and other information are available at: http://www.wendovercorp.com and http://www.globalinsight.com/itindex

Global Insight Contact:

John Bauman (610) 490-2668
john.bauman@globalinsight.com

Vicki Van Mater (703) 251-4575
vicki.vanmater@globalinsight.com

Wendover Corporation Contact:

Larry Dillon (610) 642-5280
1@wendovercorp.com

Wendover Corporation (http://www.wendovercorp.com/) is a private, 16-year-old, IT business intelligence firm located in Haverford, PA. The firm completes 133,000 surveys annually with IT decision makers at 80,000 of the largest companies throughout the United States and the United Kingdom, including every Fortune 500 business.

About Global Insight
Global Insight, Inc. (http://www.globalinsight.com/) is a privately held company that brought together the two most respected economic information companies in the world, DRI and WEFA. Global Insight provides the most comprehensive economic and financial information available on countries, regions and industries, using a unique combination of expertise, models, data and software within a common analytical framework to support planning and decision-making. Through the world's first same-day analysis and risk assessment service, Global Insight provides immediate insightful analysis of market conditions and key events around the world, covering economic, political, and operational factors. The company has over 3,800 clients in industry, finance and government with revenues in excess of $80 million, over 600 employees and 23 offices in 13 countries covering North and South America, Europe, Africa, the Middle East and Asia.


Copyright ©2009 GLOBAL INSIGHT, Inc.	Site Map • Terms of Use • Privacy Policy