2010 should see a return to normalcy in corporate IT spending, with virtualization and security at the top of many CTOs’ wish lists this year.

“We think it’s important to keep in mind that normal IT spending growth is kind of low to mid-single digit. There will certainly be areas where there’s faster growth than that,” said Todd Weller, an analyst at Stifel, Nicolaus & Co. “The other thing that I think you’ll see happen in 2010 is certainly there will be desktop, server and networking equipment refreshes as well to consider. We think in 2010, you get to a better outlook and visibility is better as well.”

Weller bases his forecast on the solid 4Q and December-quarter results released by a number of software companies, demonstrating a trend toward improved IT spending since year end. The analyst predicts the majority of 2010 IT investments will fall in the realm of cost-effective upgrades and new technology that should lead to high ROI.

“For example, from a recent InformationWeek survey, with respect to 2010 new technology investments, there was a new customer facing projects like Web portals, sales and self-service systems, new applications to support sales, new applications to cut operating costs,” said Weller, also highlighting Windows 7 as a meaningful catalyst for software updates. “Server virtualization was up there, telepresence, video conferencing, software as a service, desktop virtualization. That gives you a sense of some of the focus points.”

Of the information security companies, Weller believes ArcSight (ARST) is the most poised for growth, with 30%-plus growth rates already. Under the infrastructure umbrella, the analyst cites VMware (VMW), Citrix Systems (CTXS) and Red Hat (RHT) as important plays on virtualization.

This entry was posted on Tuesday, March 9th, 2010 at 10:06 am and is filed under General Investing. You can follow any responses to this entry through the RSS 2.0 feed.