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The buying path

The buying path

With corporate spending tighter than ever, it is vital for companies to invest their limited resources in areas with the highest probability of return.

Marketing executives have pulled out the full bag of tricks to build brand and maintain, if not increase, market share. At the same time, return on investment (ROI) has become increasingly important and they are being asked to identify new business opportunities at a lower cost.

The 2002 Intention to Purchase IT Brand Survey, conducted by IT Contacts, a division of ARN publisher IDG Communications, asked Australian businesses what their intentions to buy or upgrade IT equipment were. A total of 6,483 companies were surveyed during June and July, of which 867 (13.37 per cent) provided an indication of their intentions.

The premise of the survey is that by observing their own brands alongside their competitors, within specific industries and across organisations of different sizes, IT marketers can more easily determine potential growth areas. The data speaks volumes about what's hot and what's not, as demonstrated by the summaries below of some of the most important technology fields.

The survey was designed as a companion to the annual IT Site Census conducted by IDG Contacts. The Site Census identifies current brands and products used within organisations, whereas the Intention to Purchase survey looks at brands, products and technologies that IT executives plan to purchase within the coming year.

The results of the 2002 Intention to Purchase IT Brand Survey reveal information on more than 200 brands in 37 IT product categories, with detailed information on company intentions categorised by vertical industry sectors and employee numbers.

The questionnaire was delivered to a senior IT executive in each organisation and the collected data was analysed in August, with the checking and verification of company information forming part of the process.

Split into 10 different categories, the industry verticals covered were construction/utility, education, finance/insurance, government, health, manufacturing, resources/import/export, retail/wholesale, services and transport/distribution. In terms of employee numbers, the organisations were broken up into seven categories, ranging from less than 20 to more than 2,500.

Above all, the Intention to Purchase Brand Survey shows that while budget cuts and general uncertainty persist, there are still substantial spending plans, regardless of industry sector and across organisations of all sizes.

Following are some of the key results.

Applications

E-business

Although e-business is now regarded by most companies as an integral part of the business plan, only 21.3 per cent of survey respondents indicated an intention to purchase or upgrade in the following year.

Oracle products used for e-business applications look set to increase, with 40 per cent of all respondents in the category planning to buy. The response was fairly consistent across the spectrum of industry sectors and organisation sizes. WebSphere was the other strong brand in the category, showing good performance in most industries.

Financial and human resources

This marketplace is much more fragmented and features a high number of specialist and one-off service products. MYOB continues to be a strong player, especially with smaller organisations, while SAP returned encouraging figures across all organisation sizes, particularly among respondents with more than 1,000 employees.

More than half the government organisations that took part in the survey stated an intention to purchase. Despite offering a list of 10 products in the category, half those surveyed specified an intent to buy other brands.

Security

All the brands featured in this section of the survey - Vet, Norton, McAfee, Trend and Sophos - showed consistent levels of support across all industries. Norton was the clear market leader, with an average score of 41.1 per cent, and enjoyed particular support within smaller organisations. McAfee joined Norton at the head of the market within larger industries.

Almost 50 per cent of health and manufacturing/retail organisations surveyed indicated an intention to purchase within the next year. Less than one in three resources/import/export and construction/utility companies envisage a security application spend within the same period.

Equipment

Communications and telephony

Nokia has a big lead in this category, with its 55.7 per cent share more than doubling the score of its nearest competitor, Ericsson.

NEC was popular across all organisation categories, performing particularly well in education, where 42.9 per cent of respondents indicated an intention to spend.

The strength of minor brands in construction/utility and finance/insurance showed the need for tailored solutions required by these industries.

Storage

The perennial problem of storage for most organisations refuses to go away and this is reflected in the wide variety of brands preferred by respondents.

IBM, Seagate and Compaq continue to be the biggest three players, with 37.3 per cent of those surveyed indicating an intention to purchase IBM and 35.6 per cent Seagate. More than one in four said they planned to buy Compaq within 12 months.

IBM spiked in the retail/wholesale and transport/distribution verticals, with Seagate dominating in resources/import/export and education, and Compaq in construction/utility and health.

Only one in five health organisations surveyed indicated a planned storage spend during the next year.

Desktops

The merger of Compaq and HP creates significant market dominance in this market with more than half the sample intending to purchase or upgrade desktops within 12 months. Dell is neck and neck with Compaq as the preferred brand, with these two registering 32.1 and 30.3 per cent, respectively.

Apple continues to perform well in education, with 50 per cent of respondents indicating a planned spend, but Dell was the big mover in this vertical, polling 56.3 per cent.

More than half of construction/utility and retail wholesale respondents indicated an intention to purchase desktop equipment within 12 months.

Laptop and notebooks

This continues to be a hugely competitive category with Toshiba (33.4 per cent), Dell (32.4 per cent), Compaq (26.8 per cent) and IBM (24.5 per cent) the big four brands.

Dell performed exceptionally well in education and Toshiba in retail/wholesale. HP was the best of the rest, and 10.3 per cent of those surveyed indicating an intention to purchase.

Networking

LAN hardware

Cisco dominates in this category, with more than two out of three respondents giving an indication to purchase. Netgear, which was particularly strong in construction/utility, and 3Com, which performed well above its average in the health industry, were the closest market competitors.

Retail/wholesale and resources/import/export were the vertical markets with the greatest intention to purchase LAN hardware, while education polled the lowest.

Both the IT Site Census and the Intention to Purchase Survey are commercially available from IDG Communications. Contact Stephen Dolan on (02) 9902 2753.


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