Corporate Spending Goes Negative -- Clear Signs of a Recession in ChangeWave's Latest Software Survey Results

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ChangeWave's latest corporate software spending survey shows clear signs of a recession in business spending for the first quarter of 2008.

Changewave software purchasing survey

a general slowdown in business conditions and capital budgets

For the first time in years, a ChangeWave corporate software spending survey is pointing to negative growth for the economy. The survey presents clear signs of a recession in business spending for the first quarter of 2008.

Better than one-in-five respondents (22%) now say their company will spend less for software over the next 90 days compared to the previous 90 days -- 8 percentage points worse than our previous survey in October 2007.

Just 16% of respondents say their company will spend more -- 2 points worse than previously.

A total of 1,802 respondents involved with software purchasing in their company participated in the January 9-16 survey.

"These latest software results -- combined with our recent consumer spending survey - should end the 'are we or aren't we' in economic recession debate once and for all," said Tobin Smith, founder of ChangeWave Research and editor of ChangeWave Investing. "Now both businesses and consumers are singing from the same 'cut-thy-spending' hymnal."

(To download the chart along with the ChangeWave Corporate Software survey results, go to ChangeWave Software Spending Report).

Forces Driving the Slowdown:

Nearly one-in-10 respondents (9%) cite "a general slowdown in business conditions and capital budgets" as the foremost factor driving their companies purchasing decisions -- a number that is up 3 points since October 2007 and triple the percentage of a year ago.

In a follow-up question, respondents were asked if there had been any adjustments made to their first quarter capital budgets over the past 90 days.

Twice as many said their capital budgets were adjusted lower (22%) than said they were increased (11%) -- a powerful indicator of a very tough corporate spending environment.

The survey also looked at specific software categories and found Security Software (16%; down 7-pts) to have experienced the biggest slowdown since October 2007. Business Intelligence (8%; down 2-pts) and Document/Content Management (5%; down 2-pts) software also look softer.

On a somewhat brighter note, Virtualization (9%) and Enterprise Resource Planning (7%) spending appear similar to that of the previous survey.

But overall, the survey results show clear signs of a recession in business spending for the first quarter of 2008, and are a striking confirmation that we're now sailing through a period of heavy economic turbulence.

The ChangeWave Alliance is a network of 14,000 highly qualified business, technology, and medical professionals in leading companies of select industries -- credentialed experts who spend their everyday lives working on the frontline of technological change. ChangeWave surveys its Alliance members on a range of business and investment research and intelligence topics, collects feedback from them electronically, and converts the information into proprietary quantitative and qualitative reports.

For a copy of the entire ChangeWave Research corporate software spending survey, please contact Darlene March, March Media Relations, (714) 514-3736.


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