A recent survey indicates that corporates may increase their software purchase, although the recovery is not expected to be very fast. The survey particularly showed improvement in software segments like, Virtualization, Data Storage and Business Intelligence.

Out of the total 1768 respondents, 12% are of the opinion that their company will increase spending on software over the next 90 days, a marginal improvement from the previous survey. Around 22% believe that their organization will continue to spend less, a 5% improvement from the previous survey. Now coming to capital allocated by companies for IT spending, 9% of the respondents stated that their IT spending budget has been increased over the last 90 days, up 3% over the previous survey, while 30% stated that there is a downward revision in IT capital spending, a 6% improvement over the previous survey.

Now in the software categories, 17% of the respondents stated that their company will increase their spending on Virtualization software over the next three months, while 12% expect reduction. Coming to Data Storage, 16% of the respondents will increase spending on software in the next three months, while 11% will decrease it. Approximately 14% is in favor of increasing their spending on business intelligence software, while only 12% will reduce. We believe these are encouraging numbers for big ticket IT companies and indicate improving results in the medium term.

We believe that software developing companies like Oracle Corp. (ORCL), Microsoft Corp. (MSFT), International Business Machines (IBM) and SAP (SAP) will benefit the most.  Specifically, Microsoft with its new Windows 7 operating system (OS) launch scheduled in October will benefit from the change in sentiments. In a survey conducted recently, the company received appreciation for greater customer satisfaction, delivered by this new OS. So there is a high possibility that corporates might switch to this OS after its release.

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