Dennis Byron

CIOs See Increased IT Spending Overall

You can't take such statistics in a vacuum but if you could, this has some interesting data points in it:

-- IT spending growth to dive 50% this year (leading quant houses said IT spending grew 6-7% in 2007 so 2.3% could mean trouble)

-- 60% of CIOs to install Windows between 2008-2010 (huge win for Microsoft; if 40% are not going to install that leaves 60% of a very large number)

-- Virtualization market is totally saturated (that's a huge loss for Microsoft which has just put a lot of investment into upgrading Windows Server to support virtualization and not to good for EMC/VmWare either); this survey says there is no one left that needs it)

Dell, Sun Could Suffer As Virtualization Business Picks Up

There are some arithmetic issues in this prediction that I don't get. A "modest contraction" of server growth rate in 2009 is a lot different than no increase in the "server installed base" after 2008. The latter would not be a modest contraction, it would be a catastrophic drop to near zero in absolute number of units shipped.

But it doesn't matter. It sounds like the quote Watson Sr. supposedly made in 1940s: "'I think there is a world market for maybe five computers.' Virtualization has been around since the 1960s and it hasn't caused this effect yet. It is unlikely to start having this effect in 2009. Server virtualization is a SaaS farm play (and a useful form of increased efficiency). But tech analysts should forget "agriculture" and conisder the home.