ESG 2010 IT Spending Intentions Survey February 5, 2010

Survey Overview Online survey of senior IT professionals familiar with their organization’s IT spending in 2009 and plans for 2010. Managers responsible for evaluating, purchasing and/or operating corporate IT and data centers Medium (500-999 employees) and enterprise-class (1,000+ employees) organizations in North America and Western Europe (UK, France, Germany) 515 completed surveys © 2010 Enterprise Strategy Group

Total IT Spending Change 2009 vs. 2010 2009: 43% said IT spending would increase from previous year 2010: 52% say IT spending would increase from previous year © 2010 Enterprise Strategy Group

IT Spending Shifts from Cost Reduction to Cost Containment Mode 17% move from cost reduction mode to cost containment mode © 2010 Enterprise Strategy Group

Business Initiatives Begin to Reflect More than Just Cost Cutting The gap closes between cost reduction as an IT driver and other business priorities. Business process improvement, security, compliance, and improved business intelligence all more important than a year ago. © 2009 Enterprise Strategy Group

Changes in Justifying IT Investments Reflect Changing Business Priorities © 2009 Enterprise Strategy Group

Most Important IT Priorities for 2010 © 2010 Enterprise Strategy Group

2010 Spending Change by Technology © 2010 Enterprise Strategy Group

Percent of Organizations Increasing Spending by Technology, 2010 vs Biggest increases from previous year: Security (19%), network hardware (17%), storage hardware (16%) © 2009 Enterprise Strategy Group

Key Areas of Investment for Data Storage over the Next 12-18 Months © 2010 Enterprise Strategy Group

Total 2010 IT Spending Change Relative to 2009, by Industry © 2010 Enterprise Strategy Group

Most Important IT Priorities for 2010, by Industry #1 IT Priority #2 IT Priority #3 IT Priority #4 IT Priority #5 IT Priority Education Increase use of server virtualization Improve data backup and recovery Information security initiatives Large-scale desktop/laptop PC refresh Upgrade network infrastructure Financial Manage data growth Major application deployments or upgrades Major database deployments or upgrades Government (Federal) Implement IT governance framework Green initiatives Government (State & Local) Data center consolidation Health Care Regulatory compliance initiatives Manufacturing Communications & Media Business Services Retail Transportation & Logistics Business continuity / disaster recovery programs © 2010 Enterprise Strategy Group

Total 2010 IT Spending Change Relative to 2009, by Industry (Average) © 2010 Enterprise Strategy Group

Percent of Organizations Planning to Add New IT Staff Positions in 2010, by Industry © 2010 Enterprise Strategy Group

Expected 2009 to 2010 IT Budget Change by Industry Compared to Previous 12-Month Employment Change *Source: ESG 2010 IT Spending Intentions Survey **Source: U.S. Bureau of Labor Statistics, Employment Situation Summary, January 8, 2010 and ESG © 2010 Enterprise Strategy Group

ESG Vertical Opportunity Index Score (VOIS) for 2010 Industry rank by previous 12-month net employment gain/loss (1 = most jobs gained as % of industry total)** Industry rank by previous 12-month net employment gain/loss (1 = most absolute number of jobs gained)** Industry rank by jobs gained/lost in last 30 days as percent of industry total (1 = most jobs gained as % of industry total)** Industry rank by 2009 to 2010 total IT budget increase (1 = highest % increase)* Industry rank by percent of organizations with $50m+ 2010 IT budgets (1 = industry with most $50m+ budgets)* ESG VOIS (low score= better relative IT business opportunity in 2010) Health Care 1 3 5 13 Government (Federal) 2 10 17 Financial 7 6 19 Education 4 8 26 Communications & Media 28 Retail 29 Business Services 9 32 Government (State & Local) 34 Transportation & Logistics 36 Manufacturing 41 *Source: ESG 2010 IT Spending Intentions Survey **Source: U.S. Bureau of Labor Statistics, Employment Situation Summary, January 8, 2010 and ESG © 2010 Enterprise Strategy Group

Additional VOIS Ranking Details, by Industry ESG VOIS (low score= better relative IT business opportunity in 2010) Calendar quarter in which most IT capital spending is expected Position relative to 2009 rankings Comments Health Care 13 Q1 ↔ 333,200 new U.S. health care jobs added in past 12 months. 67% of health care organizations will increase IT spending in 2010, driven by compliance and security requirements. Billing and business intelligence are top application priorities. Government (Federal) 17 Q3 Information security initiatives continue to be top priority. Consequently, improving security and risk management is viewed as the most important criteria in justifying 2010 IT investments. PC vendors will benefit as 34% of respondents plan large-scale desktop/laptop refreshes in 2010. Financial 19 ↑ Improved IT spending outlook and positive job growth in the last 90 days raises Financial in the VOIS rankings. Managing data growth is top 2010 IT priority. 31% will make significant 2010 investments in data reduction technologies. Education 26 N/A Improved collaboration is major driver of IT spending. Major priorities include server virtualization and improving backup, but respondents report serious shortages of skills in those areas. Public sector significantly less healthy than private institutions. Communications & Media 28 Q4 63% will increase IT spending in 2010 and 48% will add IT staff. 19% have multiple data center construction projects underway, more than any other industry. High interest in data reduction, file storage solutions, and power-efficient servers. LEGEND: ↑higher ranking relative to 2009 ↓lower ranking relative to 2009 ↔ ranking unchanged from 2009 © 2010 Enterprise Strategy Group

Additional VOIS Ranking Details, by Industry (cont.) ESG VOIS (low score= better relative IT business opportunity in 2010) Calendar quarter in which most IT capital spending is expected Position relative to 2009 rankings Comments Retail 29 Q2 ↑ 2.9% Y/Y increase in holiday sales and slowing job losses boosts optimism for 2010 and raise Retail 2 spots in VOIS rankings. 28% expect business growth to be a driver of IT spending, more than any other industry. Top IT priorities include business intelligence applications, improved security and network upgrades. Business Services 32 Increase in temporary staffing boosts employment (and modest IT spending gains) in services sector. Enterprise content management / document management is top 2010 application priority. Government (State & Local) 34 ↓ Poor economic conditions continue to be felt in budget pressures and job cuts (close to 10 thousand in past 30 days). 47% say their IT organization is still in cost reduction mode. Industry most likely to have IT hiring freeze in effect. Critical lack of virtualization skills leads to services opportunities for vendors. Transportation & Logistics 36 Q3 Continuing job losses and virtually no expected growth in 2010 IT spending growth causes drop in 2010 rankings. This is the industry most likely to characterize IT spending as being in major cost reduction mode. Many organizations looking to renegotiate contracts with IT vendors in effort to reduce costs. Manufacturing 41 ↔ IT spending increases this year after 2009 declines. 46% will look to contain costs via the purchase of new technologies that offer an improved ROI, up from 24% in 2009. Data center consolidation, virtualization, and supply chain management are major priorities. LEGEND: ↑higher ranking relative to 2009 ↓lower ranking relative to 2009 ↔ ranking unchanged from 2009 © 2010 Enterprise Strategy Group