CIOs to Hold Off on Immediate Investments in Microsoft Office and
Vista 2007 Hardware, Storage and Security remain focus spending
categories for 2007


FRAMINGHAM, Mass.--(BUSINESS WIRE)--Findings from the quarterly CIO
Magazine Tech PollTM show IT spending projections decreased in
October-December with CIOs predicting IT spending increases of 5.8%
over the next 12 months, down from 6.5% in the previous quarter. Poll
results also show the majority of CIOs (63.6%) have no plans to invest
in Office 2007 or Vista 2007 next year. Key focus categories of growth
are Computer Hardware, Storage and Security.

"Corporate profits growth is likely to slow next year after several
years of higher-than-expected growth," says Dr. Ed Yardeni, Chief
Investment Strategist for Oak Associates. "This outlook may explain
why CIOs' projected budgets were already relatively subdued in our
December poll."

"This forecasted decline in tech spending is in sync with other recent
reports suggesting businesses will scale back capital spending in
2007," says Gary Beach, Publisher of CIO magazine. "However, with
nearly two-thirds of CIO respondents indicating plans to focus on
either growth or innovation in 2007, the question for CIOs remains how
to implement these agendas with budgets that are largely flat."

Conversely, Chris Whitmore, Director IT Hardware Research for Deutsche
Bank Securities, notes CIOs' plans to increase spending in computer
hardware, stating, "Expected spending on Computer Hardware is the
highest it has been since the CIO Magazine Tech Poll was first
published in 2000. Combined with continued strong growth expectations
in storage, the survey suggests that spending on hardware in 2007 will
be quite healthy."

The CIO Magazine Tech Poll provides technology and business
executives, economists, and policymakers with a tool to gauge
technology growth trends to assess the impact on the overall economy.
Poll panelists are asked to answer questions on overall current and
projected IT budgets on a quarterly basis. Also covered are future
spending plans for IT hardware, software, services and Internet
initiatives. The results of the December poll, conducted from December
7-14th, are detailed below.

CIO MAGAZINE TECHNOLOGY GROWTH INDICATORS

The CIO Magazine Tech Poll results are used to construct the CIO
Magazine Tech Future Growth Index (TFGI), which projects IT activity
over the next 12 months1. In December the TFGI is 2.3, down from 2.5
in September. Tables 1 through 3, providing historical data, are
available at http://www.cio.com/info/releases/122906_techpoll.pdf.

OVERALL IT BUDGET AND COSTS

In the December Poll, panelists project IT budgets will grow by 5.8%
over the next 12 months, down from 6.5% in the September poll. In
addition, CIOs report that IT budgets increased by an average of 5.8%
over the last 12 months, up from 5.0% last quarter.

IT SECTORS

When asked about spending across eight specific IT categories, the
average number of panelists who plan to increase spending over the
next 12 months is 40.7% in December, up from 39.7% in September. The
percentage of panelists who plan to decrease spending remains flat at
13.7% (vs. 13.8% in September). Within the IT spending categories,
Computer Hardware overtakes Storage Systems as the top spending
priority in the poll with 55.8% of respondents planning to increase
spending in this segment (vs. 46.9% in September) and only 11.7%
intending to decrease spending (vs. 16.3% in September). Storage
Systems and Security Software place second and third with 52.9% and
47.5% (up from 48.1% and 46.9% in September) respectively.

Compensation Costs and Labor Market Conditions: IT compensation costs
(including salaries, benefits, and bonuses excluding stock options)
increased an average of 4.8% in the 12 months ending December,
slightly down from 4.9% in September. The supply of labor tightened
with 5.8% of the respondents reporting IT labor is 'plentiful' (vs.
6.2% in September), 56.7% cite IT labor is 'available' (vs. 59.0% in
September) and 35.0% report that IT professionals are 'hard to find'
(vs. 31.1% in September).

Special Questions: This quarter's poll includes four special
questions. The first question asked panelists whether they planned to
acquire Microsoft's new operating system Vista and new productivity
software suite Office 2007 in 2007. The majority (63.6%) of
respondents cite they have no plans to upgrade to Vista or Office 2007
in 2007, while 20.7% need to evaluate pricing and user training costs
before considering an upgrade. Of the 15.8% that will upgrade, 8.3%
will upgrade to both, while 5.8% will only upgrade to Office 2007 and
1.7% will only upgrade to Vista.

The second question asked panelists how much local client capacity was
required on their desktops and laptops. Of respondents, two-thirds of
panelists cite 40GB or 50-80GB of capacity as sufficient (32.2% and
33.1% of respondents, respectively). Of the remaining third, 19.8%
require 20-30GB, 12.4% require 100-200GB, and 2.5% require more than
200GB.

The third question asked about the potential for solid-state (flash)
memory in laptops versus hard disk drives. Roughly half of respondents
prefer hard disk drives due to lower cost and higher capacity. Of the
respondents, 34.7% do not believe the higher cost of flash justifies
the benefits, while 15.7% need at least 60GB of capacity. The
remaining half (49.6%) of CIOs would consider flash if the added cost
was $500 or less. With at least 40GB of capacity, 28.9% of respondents
would consider flash if the price differential was less than $200 and
11.6% of CIOs would settle for a price differential of $200-$500. The
remaining 9.1% of respondents only need 20GB of capacity.

The fourth question asked panelists about their IT investment focus in
2007. About two-fifths (42.1%) will focus on enabling growth, while
27.3% say they plan to improve IT performance. Of the remaining
respondents, 19.0% say IT investments will focus on creating
innovation and 11.6% say the focus will be on cost reduction.

CIO MAGAZINE TECH POLL

The CIO Magazine Tech Poll was created by CIO magazine in August 2000
in association with well known economist Dr. Ed Yardeni, Chief
Investment Strategist, Oak Associates. The poll is proving to be an
accurate indicator of technology spending trends. The latest poll
opened on Thursday, December 7th, and closed on Thursday, December
14th. An invitation to respond to the poll was distributed via e-mail
to a panel of more than 2,000 chief information officers and 3,000
randomly selected CIO readers who match the job function criteria
"CIO."

Demographics: In the December poll, there were 121 responses with
large firms (1,000-5,000 employees) and very large firms (more than
5,000 employees) representing almost half (46.7%) of the respondents.
A broad cross-section of industries is represented, including
non-computer/communications related manufacturing (13%), state or
local government (12%), finance (12%), technology services (11%),
health care (10%) and legal services (6%).

The complete November CIO Magazine Tech Poll can be found at
http://peoplepolls.com/results/CIO/120706.asp?user=CIO

Previous poll results can be found at http://www.cio.com/info/releases.

1 The TFGI is calculated by multiplying the projected growth rate of
future IT budgets by the average percentage of respondents saying they
plan to increase spending on eight unique categories: computer
hardware, data networking equipment, telecom equipment, storage
systems, outsourced IT services, infrastructure software, and
eBusiness software.

2 Averages exclude responses over 100%.