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Virtual servers, BI offer bright spots in dark quarter

VARs expect server virtualization and business intelligence to be relative hot spots in a pretty bleak first quarter for IT spending

VARs expect server virtualization and business intelligence to be relative hot spots in what looks to be a pretty bleak first quarter for IT spending, according to new survey numbers from market researcher RWBaird Inc.

According to 40 enterprise resellers in North America and Europe surveyed, IT spending in the first quarter of 2009 is expected to be "below normal seasonality," according to the RWBaird preliminary Q4 [value-added reseller] survey.

Storage shows the highest relative strength, as reported in After that, server virtualization and business intelligence (BI) are expected to be the top IT budget draws.

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According to the Baird report, server virtualization adoption has remained robust for the past few quarters, spelling server virtualization opportunities for VARs, "though we note that [VMware] revenue acceleration has not been well correlated with field activity due to license pricing reductions and long-term enterprise license agreements." .

PC upgrade numbers look to be especially weak as companies try to stretch their refresh cycles beyond the traditional time frame. "If you were up for a hardware refresh, you can delay that now a year or so depending on your use case," said Jayson Noland, senior analyst for RWBaird.

Possible confusion around the Windows XP to Windows 7 upgrade path may cause companies to hold off on PC updates, some VARs, who were not surveyed, have said. Many businesses that have yet to move from Window XP to Vista may now wait for Windows 7, which could debut as early as late 2009, several VARs said.

The relative strength in BI was a bit confusing, according to Noland. "Some people use that term to describe lots of different things, solutions range from thousands up to millions, and I think we're talking here about the lower end," he said.

Among the vendors that save customers the most money, VMware Inc. came in at number one, followed by data deduplication specialist Data Domain Inc.;
storage appliance maker NetApp; Hewlett-Packard Co.; and Compellent Technologies.

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