April 16, 2010 / 1:44 PM / in 9 years

Business sees cautious return to IT spend-survey

* IT spending seen rising slightly in next 12 mths

* Price top criteria for CIOs

LONDON, April 16 (Reuters) - Business spending on IT is expected to make a tentative recovery in the next 12 months, after budgets were slashed a year ago in the global downturn, according to a UBS survey published on Friday.

Chief information officers (CIOs) in Europe and the United States indicated that IT budgets would rise by 0.5 percent year-on-year in the next 12 months, compared to the 5.1 percent decline seen a year ago.

UBS said it expected a gradual return to PC spend rather than a significant uptick, and given the continued focus on managing costs, price was the CIOs’ top criteria for choosing a vendor.

Hewlett-Packard (HPQ.N) was the most favoured brand, with 20 percent of CIOs expecting to spend more with the company over the next 12 months, followed by IBM (IBM.N), with 17 percent, and Dell DELL.O, with 15 percent.

The three were seen by respondents as being the most aggressively priced vendors over the last six months.

Server virtualisation and storage remained a bigger spending priority than new PCs, the survey found, and in networking, CIOs see Cisco Systems (CSCO.O) maintaining market share against emerging competitors such as HP and IBM.

Microsoft (MSFT.O), Oracle ORCL.O and VMware (VMW.N) were primed to get a bigger cut of the CIO wallet in 2010, it said. Some 46 percent of vendors expected to spend more with Microsoft over the next 12 months, helped by increasing interest in the Windows 7 operating system.

UBS surveyed 100 companies, of which 60 were located in the United States, 14 in the UK, 13 in France and 13 in Germany. (Reporting by Paul Sandle; Editing by Rupert Winchester)

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