Changewave Research: 3Q 2003 Corporate IT Spending Survey

ChangeWave Research: 3Q 2003 Corporate IT Spending Survey

ChangeWave Research:

3Q 2003 Corporate IT Spending Survey

Latest Survey Shows a Significant Improvement in Overall IT Spending for 3Q – Laptops Score Surprising Surge

Abstract

The latest Alliance survey on 3rd Quarter corporate IT spending shows a significant improvement in overall IT expenditures for the coming quarter, led by a surprising surge in laptops. Other big winners include server hardware & software, wireless systems, financial analytics and database management software. A total of 524 Alliance members participated.

Overall, 29% of Alliance members report their company will be increasing IT spending for the 3rd Quarter while only 16% report spending will decrease (or there will be no spending at all). The positive 13 percentage point differential is the largest we’ve seen in a corporate IT spending survey since February 2002.

At the individual IT subcategory level, 65% of the subcategories we track showed an increase in corporate expenditures while only 14% showed a decline. This represents a significant about-face from just three months ago, when 68% of the categories were still registering a decline.

Will there be any IT losers next quarter? Yes, but only a select few. Large Centralized Data Storage and Network Attached Storage made the list of losing subcategories for 3Q.

Focusing on the immediate future, we asked respondents to rate the current willingness of their company to spend money on IT products and services. A total of 36% said their company is currently giving a "Green Light" to IT spending (i.e., spending is normal); while 48% said their company has given a "Yellow Light" (i.e., spending is downsized, though not completely stopped); and 14% said their company has given a "Red Light" to IT spending (i.e., spending is on hold).

Looking ahead at the second half of 2003 (Jul-Dec), 32% think their company’s overall IT spending budget will be greater thanthe first half of 2003 (Jan-Jun), only 18% think it will be less than the first half.

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Table of Contents

Summary of Key Findings...... 3

Chart One: 3rd Quarter 2003 IT Spending...... 3

Last Eight IT Spending Surveys: A Comparison...... 4

Chart Two: Last 8 IT Spending Surveys...... 4

Willingness to Spend on IT Products and Services...... 4

Chart Three: Willingness of Company to Spend on IT.....5
Chart Four: Willingness to Spend – A Comparison...... 5

A Closer Look at 2003 and 2004...... 5

Chart Five: IT Budget for 2nd Half 2003...... 6
Chart Six: IT Budget for 1st Half 2004...... 6

Effects of War on IT Spending...... 6

Chart Seven: Effect of War on 1st Half 2003 Spending....7
Chart Eight: Deferred IT Spending...... 7

“Must Have” IT Spending...... 8

Chart Nine: IT Spending Breakdown for 1st Half 2003.....8
Chart Ten: IT Spending Breakdown for 2nd Half 2003.....8

Winning and Losing IT Spending Subcategories for 3rd Quarter....9

IT Subcategory Winners – Largest Projected 3Q Spending Increases..9

IT Subcategory Losers – Largest Projected 3Q Spending Decreases..13

IT Subcategory – Little to No Change in Projected 3Q Spending...... 15

ChangeWave Research Methodology...... 20

About ChangeWave Research...... 21

I. Summary of Key Findings

The Last Eight IT Spending Surveys: A Comparison

As the following chart shows, in our current survey (June 2003) 29% of members report an increase in IT spending for the next quarter, a 2 percentage-point improvement over the Feb. 2003 figure of 27%. Moreover, this is the third survey in a row in which we’ve had an increase.

Only 16% of members are still saying their IT spending will decrease for the coming quarter (or there will be no spending at all), which is the lowest recorded total for this variable since we began our IT spending surveys in Aug 2001.

Willingness to Spend on IT Products and Services

Focusing on the immediate future, we asked respondents to rate the current willingness of their company to spend on IT products and services.

A total of 36% said their company is currently giving a "Green Light" to IT spending (i.e., spending is normal); while 47% said their company has given a “Yellow Light" (i.e., spending is downsized, though not completely stopped); and 14% said their company has given a "Red Light" to IT spending (i.e., spending is on hold).

The “Green Light” findings represent a modest 2 percentage-point improvement over our February 2003 survey results. And the high “Yellow Light” number suggests that while things are improving, current corporate IT spending is still far from robust.

A Closer Look at 2003 and 2004

Focusing on the second half of 2003 (Jul-Dec), 32% of respondents think their company’s overall IT spending budget will be greater thanthe first half of 2003 (Jan-Jun), only 18% think it will be less than the first half.

Looking ahead to the 1st half of 2004 (Jul-Dec), 44% of respondents think their company’s overall IT spending budget will be greater thanthe first half of 2003 (Jan-Jun), only 11% think it will be less than the first half.

Effects of the War on IT Spending

In previous Alliance surveys, by more than a five-to-one margin members told us "general business conditions" rather than "the war" had acted to slow or postpone their company's capital spending plans.

The current survey findings essentially reconfirm this. Only 10% of respondents said that yes, the uncertainty created by the Iraq war had delayed or deferred their company’s IT spending during the 1st half of 2003, while 81% said no, it hadn’t.

We then asked the 10% who said the Iraq war had negatively affected their IT spending, to tell us whether their deferred spending would be made up during the 2nd half of 2003. One in three (32%) said yes: “The IT spending we delayed or deferred during the first half of 2003 is being added to the IT spending budget for the second half of 2003.”

“Must Have” IT Spending

With regards to the percentage of corporate IT spending that falls into the “must have” (basic maintenance/replacement) category, there is little difference between the 1st half and 2nd half of 2003.

II. Winning and Losing IT Spending Subcategories for 3rd Quarter

Table One: IT Subcategory Winners – Largest Projected 3Q Spending Increases

WINNERS / (A) Percent
Upgrading/
Buying
for 1st Time / (B) Percent
Downgrading/
Phasing Out / (C) Net %
Change Score
(A-B) / (D) Percentage
Point Change
From Previous Survey
I. PCs
(a) Laptops
Feb 2002 / 24% / 8% / 16% / --
June 2002 / 23% / 6% / 17% / 1%
Sept 2002 / 22% / 6% / 16% / -1%
Nov 2002 / 24% / 5% / 19% / 3%
Feb 2003 / 22% / 4% / 18% / -1%
June 2003 / 25% / 3% / 22% / 4%
(b) Personal Productivity Software
Feb 2002 / 7% / 4% / 3% / --
June 2002 / 5% / 3% / 2% / -1%
Sept 2002 / 4% / 3% / 1% / -1%
Nov 2002 / 4% / 2% / 2% / 1%
Feb 2003 / 2% / 3% / -1% / -3%
June 2003 / 4% / 2% / 2% / 3%
(c) PC Accessories
Feb 2002 / 9% / 6% / 3% / --
June 2002 / 7% / 5% / 2% / -1%
Sept 2002 / 8% / 4% / 4% / 2%
Nov 2002 / 10% / 3% / 7% / 3%
Feb 2003 / 5% / 3% / 2% / -5%
June 2003 / 6% / 2% / 4% / 2%
II. Server Software
(a) Application Server Software
Feb 2002 / 13% / 4% / 9% / --
June 2002 / 14% / 3% / 11% / 2%
Sept 2002 / 12% / 3% / 9% / -2%
Nov 2002 / 10% / 2% / 8% / -1%
Feb 2003 / 11% / 3% / 8% / --
June 2003 / 13% / 2% / 11% / 3%
WINNERS / (A) Percent
Upgrading/
Buying
for 1st Time / (B) Percent
Downgrading/
Phasing Out / (C) Net %
Change Score
(A-B) / (D) Percentage
Point Change
From Previous Survey
III. Server Hardware
(a) Server Hardware – Overall*
Feb 2002 / 27% / 7% / 20% / --
June 2002 / 28% / 5% / 23% / 3%
Sept 2002 / 21% / 5% / 16% / -7%
Nov 2002 / 22% / 4% / 18% / 2%
Feb 2003 / 23% / 4% / 19% / 1%
June 2003 / -- / -- / -- / --
Server Hardware Breaks Down into the Following Sub-Categories
(a) Unix-Based Server Hardware / 11% / 6% / 5% / --
(i) With Intel Chips
June 2003 / 5% / 2% / 3% / --
(ii) Without Intel Chips
June 2003 / 6% / 4% / 2% / --
(b) Linux-Based Server Hardware / 9% / 3% / 6%
(i) With Intel Chips
June 2003 / 7% / 1% / 6% / --
(ii) Without Intel Chips
June 2003 / 2% / 2% / 0% / --
(c) Microsoft-Based Server Hardware
June 2003 / 16% / 3% / 13% / --
*Note: The June 2003 IT Spending survey is the first to contain specific Server Hardware sub-categories. Due to the inclusion of these Server Hardware sub-categories, we have not published the June 2003 Server Hardware overall results.
IV. E-Bus/Internet Software/Tools
(a) CRM
Feb 2002 / 16% / 3% / 13% / --
June 2002 / 13% / 2% / 11% / -2%
Sept 2002 / 10% / 2% / 8% / -3%
Nov 2002 / 9% / 3% / 6% / -2%
Feb 2003 / 7% / 3% / 4% / -2%
June 2003 / 8% / 2% / 6% / 2%
WINNERS / (A) Percent
Upgrading/
Buying
for 1st Time / (B) Percent
Downgrading/
Phasing Out / (C) Net %
Change Score
(A-B) / (D) Percentage
Point Change
From Previous Survey
V. Software: Applications
(a) Database Management
Feb 2002 / 19% / 3% / 16% / --
June 2002 / 15% / 5% / 10% / -6%
Sept 2002 / 15% / 2% / 13% / 3%
Nov 2002 / 13% / 2% / 11% / -2%
Feb 2003 / 12% / 3% / 9% / -2%
June 2003 / 15% / 2% / 13% / 4%
(b) Financial Analytics
Feb 2002 / 11% / 3% / 8% / --
June 2002 / 8% / 3% / 5% / -3%
Sept 2002 / 7% / 2% / 5% / --
Nov 2002 / 7% / 2% / 5% / --
Feb 2003 / 4% / 3% / 1% / -4%
June 2003 / 6% / 2% / 4% / 3%
(c) Enterprise Mgmt Apps
Feb 2002 / 9% / 2% / 7% / --
June 2002 / 8% / 3% / 5% / -2%
Sept 2002 / 7% / 2% / 5% / --
Nov 2002 / 6% / 1% / 5% / --
Feb 2003 / 5% / 3% / 2% / -3%
June 2003 / 7% / 2% / 5% / 3%
WINNERS / (A) Percent
Upgrading/
Buying
for 1st Time / (B) Percent
Downgrading/
Phasing Out / (C) Net %
Change Score
(A-B) / (D) Percentage
Point Change
From Previous Survey
VI. Networking
(a) LANs/WANs
Feb 2002 / 15% / 3% / 12% / --
June 2002 / 17% / 4% / 13% / 1%
Sept 2002 / 13% / 3% / 10% / -3%
Nov 2002 / 11% / 1% / 10% / --
Feb 2003 / 9% / 2% / 7% / -3%
June 2003 / 11% / 2% / 9% / 2%
(b) Wireless Networking – Overall*
June 2003 / 17% / 1% / 16% / --
Wireless Networking Breaks Down into the Following Sub-Categories
(a) Wireless - 802.11
June 2003 / 15% / 0% / 15% / --
(b) Wireless - Non 802.11
June 2003 / 2% / 1% / 1% / --
*Note: The June 2003 survey is the first time that we have surveyed the Alliance on these Wireless Networking sub-categories.
WINNERS / (A) Percent
Upgrading/
Buying
for 1st Time / (B) Percent
Downgrading/
Phasing Out / (C) Net %
Change Score
(A-B) / (D) Percentage
Point Change
From Previous Survey
VII. Outsourced IT Services
(a) Outsourced Contract Prog
Feb 2002 / 7% / 9% / -2% / --
June 2002 / 6% / 8% / -2% / --
Sept 2002 / 6% / 8% / -2% / --
Nov 2002 / 5% / 8% / -3% / -1%
Feb 2003 / 7% / 8% / -1% / 2%
June 2003 / 8% / 6% / 2% / 3%
(b) Outsourced App Dev
Feb 2002 / 7% / 8% / -1% / --
June 2002 / 6% / 7% / -1% / --
Sept 2002 / 7% / 7% / 0% / 1%
Nov 2002 / 5% / 7% / -2% / -2%
Feb 2003 / 6% / 6% / 0% / 2%
June 2003 / 6% / 3% / 3% / 3%
VIII. Security
(a) Security Software
Feb 2002 / 22% / 1% / 21% / --
June 2002 / 29% / 1% / 28% / 7%
Sept 2002 / 29% / 1% / 28% / --
Nov 2002 / 24% / 0% / 24% / -4%
Feb 2003 / 21% / 1% / 20% / -4%
June 2003 / 23% / 1% / 22% / 2%
IX. Storage
(a) Storage Area Networks (SANs)*
June 2003 / 8% / 1% / 7% / --
*Note: The June 2003 survey is the first time we have surveyed the Alliance on this specific sub-category.

Table Two: IT Subcategory Losers – Largest Projected 3Q Spending Decreases

LOSERS / (A) Percent
Upgrading/
Buying
for 1st Time / (B) Percent
Downgrading/
Phasing Out / (C) Net %
Change Score
(A-B) / (D) Percentage
Point Change
From Previous Survey
I. Storage
(a) Network Attached Storage
Feb 2002 / 12% / 3% / 9% / --
June 2002 / 12% / 2% / 10% / 1%
Sept 2002 / 8% / 2% / 6% / -4%
Nov 2002 / 9% / 2% / 7% / 1%
Feb 2003 / 10% / 2% / 8% / 1%
June 2003 / 5% / 1% / 4% / -4%
(b) Large Centralized Hardware Systems (Mainframe)*
June 2003 / 1% / 4% / -3% / --
(c) Tape/Archival Subsystems*
June 2003 / 2% / 4% / -2% / --
*Note: The June 2003 survey is the first time we have surveyed the Alliance on these specific sub-categories.
II. Networking
(a) Infrastructure Installations
Feb 2002 / 15% / 5% / 10% / --
June 2002 / 11% / 4% / 7% / -3%
Sept 2002 / 10% / 2% / 8% / 1%
Nov 2002 / 6% / 2% / 4% / -4%
Feb 2003 / 8% / 2% / 6% / 2%
June 2003 / 6% / 1% / 5% / -1%
LOSERS / (A) Percent
Upgrading/
Buying
for 1st Time / (B) Percent
Downgrading/
Phasing Out / (C) Net %
Change Score
(A-B) / (D) Percentage
Point Change
From Previous Survey
III. Outsourced IT Services
(a) Web Hosting
Feb 2002 / 8% / 5% / 3% / --
June 2002 / 7% / 5% / 2% / -1%
Sept 2002 / 4% / 6% / -2% / -4%
Nov 2002 / 5% / 4% / 1% / 3%
Feb 2003 / 8% / 3% / 5% / 4%
June 2003 / 5% / 1% / 4% / -1%
IV. Security
(a) Disaster Recovery
Feb 2002 / 13% / 1% / 12% / --
June 2002 / 12% / 1% / 11% / -1%
Sept 2002 / 10% / 1% / 9% / -2%
Nov 2002 / 9% / 1% / 8% / -1%
Feb 2003 / 7% / 1% / 6% / -2%
June 2003 / 7% / 2% / 5% / -1%

Table Three: IT Subcategories with Little to No Change in Projected 3Q Spending

LITTLE TO NO CHANGE / (A) Percent
Upgrading/
Buying
for 1st Time / (B) Percent
Downgrading/
Phasing Out / (C) Net %
Change Score
(A-B) / (D) Percentage
Point Change
From Previous Survey
I. PCs
(a) PC Operating Systems
Feb 2002 / 9% / 4% / 5% / --
June 2002 / 8% / 3% / 5% / --
Sept 2002 / 10% / 3% / 7% / 2%
Nov 2002 / 8% / 2% / 6% / -1%
Feb 2003 / 6% / 3% / 3% / -3%
June 2003 / 6% / 2% / 4% / 1%
(b) Desktops
Feb 2002 / 29% / 11% / 18% / --
June 2002 / 27% / 8% / 19% / 1%
Sept 2002 / 27% / 10% / 17% / -2%
Nov 2002 / 29% / 8% / 21% / 4%
Feb 2003 / 27% / 7% / 20% / -1%
June 2003 / 27% / 6% / 21% / 1%
(c) PDAs
Feb 2002 / 9% / 5% / 4% / --
June 2002 / 7% / 4% / 3% / -1%
Sept 2002 / 7% / 4% / 3% / --
Nov 2002 / 6% / 3% / 3% / --
Feb 2003 / 5% / 3% / 2% / -1%
June 2003 / 6% / 3% / 3% / 1%
(d) Flat-Panel Displays
Feb 2002 / 16% / 3% / 13% / --
June 2002 / 14% / 3% / 11% / -2%
Sept 2002 / 13% / 3% / 10% / -1%
Nov 2002 / 17% / 2% / 15% / 5%
Feb 2003 / 14% / 2% / 12% / -3%
June 2003 / 14% / 2% / 12% / --
LITTLE TO NO CHANGE / (A) Percent
Upgrading/
Buying
for 1st Time / (B) Percent
Downgrading/
Phasing Out / (C) Net %
Change Score
(A-B) / (D) Percentage
Point Change
From Previous Survey
II. Security
(a) Backup/Recovery Software
Feb 2002 / 19% / 1% / 18% / --
June 2002 / 17% / 1% / 16% / -2%
Sept 2002 / 15% / 1% / 14% / -2%
Nov 2002 / 13% / 1% / 12% / -2%
Feb 2003 / 11% / 2% / 9% / -3%
June 2003 / 10% / 1% / 9% / --
III. Networking
(a) Switches/Hubs/Routers
Feb 2002 / 17% / 4% / 13% / --
June 2002 / 17% / 4% / 13% / --
Sept 2002 / 14% / 3% / 11% / -2%
Nov 2002 / 14% / 1% / 13% / 2%
Feb 2003 / 15% / 2% / 13% / --
June 2003 / 16% / 2% / 14% / 1%
(b) Remote Networks
Feb 2002 / 11% / 4% / 7% / --
June 2002 / 8% / 3% / 5% / -2%
Sept 2002 / 5% / 3% / 2% / -3%
Nov 2002 / 5% / 2% / 3% / 1%
Feb 2003 / 4% / 3% / 1% / -2%
June 2003 / 3% / 1% / 2% / 1%
(c) Edge Routing
Feb 2002 / -- / -- / -- / --
June 2002 / 3% / 2% / 1% / --
Sept 2002 / 3% / 0% / 3% / 2%
Nov 2002 / 3% / 1% / 2% / -1%
Feb 2003 / 3% / 2% / 1% / -1%
June 2003 / 2% / 1% / 1% / --
LITTLE TO NO CHANGE / (A) Percent
Upgrading/
Buying
for 1st Time / (B) Percent
Downgrading/
Phasing Out / (C) Net %
Change Score
(A-B) / (D) Percentage
Point Change
From Previous Survey
IV. E-Bus/Internet Software/Tools
(a) Supply Chain/Procurement
Feb 2002 / 12% / 3% / 9% / --
June 2002 / 8% / 3% / 5% / -4%
Sept 2002 / 5% / 2% / 3% / -2%
Nov 2002 / 5% / 3% / 2% / -1%
Feb 2003 / 4% / 3% / 1% / -1%
June 2003 / 4% / 2% / 2% / 1%
V. Application Dev
(a) XML
Feb 2002 / 11% / 2% / 9% / --
June 2002 / 9% / 2% / 7% / -2%
Sept 2002 / 7% / 1% / 6% / -1%
Nov 2002 / 10% / 1% / 9% / 3%
Feb 2003 / 8% / 1% / 7% / -2%
June 2003 / 9% / 1% / 8% / 1%
(b) App Integration Software
Feb 2002 / 11% / 3% / 8% / --
June 2002 / 7% / 2% / 5% / -3%
Sept 2002 / 7% / 3% / 4% / -1%
Nov 2002 / 8% / 2% / 6% / 2%
Feb 2003 / 5% / 1% / 4% / -2%
June 2003 / 6% / 1% / 5% / 1%
(c) Application Dev Tools
Feb 2002 / 11% / 3% / 8% / --
June 2002 / 13% / 3% / 10% / 2%
Sept 2002 / 10% / 4% / 6% / -4%
Nov 2002 / 12% / 2% / 10% / 4%
Feb 2003 / 11% / 3% / 8% / -2%
June 2003 / 10% / 2% / 8% / --
(d) Java
Feb 2002 / 11% / 3% / 8% / --
June 2002 / 10% / 2% / 8% / --
Sept 2002 / 7% / 3% / 4% / -4%
Nov 2002 / 8% / 2% / 6% / 2%
Feb 2003 / 7% / 3% / 4% / -2%
June 2003 / 6% / 2% / 4% / --
LITTLE TO NO CHANGE / (A) Percent
Upgrading/
Buying
for 1st Time / (B) Percent
Downgrading/
Phasing Out / (C) Net %
Change Score
(A-B) / (D) Percentage
Point Change
From Previous Survey
VI. Telecom
(a) Telecom Software
Feb 2002 / 6% / 5% / 1% / --
June 2002 / 5% / 5% / 0% / -1%
Sept 2002 / 4% / 3% / 1% / 1%
Nov 2002 / 4% / 4% / 0% / -1%
Feb 2003 / 4% / 3% / 1% / 1%
June 2003 / 4% / 2% / 2% / 1%
(b) Video Conferencing
Feb 2002 / 13% / 3% / 10% / --
June 2002 / 9% / 3% / 6% / -4%
Sept 2002 / 6% / 4% / 2% / -4%
Nov 2002 / 7% / 4% / 3% / 1%
Feb 2003 / 6% / 3% / 3% / --
June 2003 / 5% / 2% / 3% / --
VII. Outsourced IT Services
(a) Outsourced IT Mgmt
Feb 2002 / 8% / 8% / 0% / --
June 2002 / 7% / 9% / -2% / -2%
Sept 2002 / 7% / 7% / 0% / 2%
Nov 2002 / 6% / 7% / -1% / -1%
Feb 2003 / 6% / 6% / 0% / 1%
June 2003 / 5% / 4% / 1% / 1%
(b) ASPs
Feb 2002 / 3% / 2% / 1% / --
June 2002 / 3% / 3% / 0% / -1%
Sept 2002 / 2% / 4% / -2% / -2%
Nov 2002 / 1% / 3% / -2% / --
Feb 2003 / 2% / 2% / 0% / 2%
June 2003 / 2% / 1% / 1% / 1%
LITTLE TO NO CHANGE / (A) Percent
Upgrading/
Buying
for 1st Time / (B) Percent
Downgrading/
Phasing Out / (C) Net %
Change Score
(A-B) / (D) Percentage
Point Change
From Previous Survey
VIII. Software: Applications
(a) ERP
Feb 2002 / 7% / 4% / 3% / --
June 2002 / 8% / 3% / 5% / 2%
Sept 2002 / 5% / 3% / 2% / -3%
Nov 2002 / 5% / 3% / 2% / --
Feb 2003 / 4% / 4% / 0% / -2%
June 2003 / 5% / 4% / 1% / 1%
(b) Enterprise Integration
Feb 2002 / 16% / 3% / 13% / --
June 2002 / 12% / 2% / 10% / -3%
Sept 2002 / 9% / 2% / 7% / -3%
Nov 2002 / 9% / 2% / 7% / --
Feb 2003 / 7% / 1% / 6% / -1%
June 2003 / 8% / 2% / 6% / --
IX. Storage
(a) Small to Mid Size Distributed Systems*
June 2003 / 2% / 0% / 2% / --
(b) Blade Servers*
June 2003 / 2% / 1% / 1% / --
*Note: The June 2003 survey is the first time we have surveyed the Alliance on these specific sub-categories.
X. Telecom
(a) Wireless Telecom**
Feb 2002 / 14% / 5% / 9% / --
June 2002 / 11% / 4% / 7% / -2%
Sept 2002 / 9% / 2% / 7% / --
Nov 2002 / 14% / 2% / 12% / 5%
Feb 2003 / 10% / 2% / 8% / -4%
June 2003 / -- / -- / -- / --
**Note: Due to changes in the current surveys’ Wireless categories, we did not publish the June 2003 Wireless Telecom results.

III. ChangeWave Research Methodology

These findings are based on a survey of ChangeWave Alliance members conducted online between May 27 – June 3, 2003. The goal of the survey was to get an up-to-date picture of IT spending for the 3rd Quarter of 2003. To this end, the survey was composed of a sample of 524accredited Alliance members who are involved with IT spending in their organization.

The Alliance’s proprietary research and business intelligence gathering system is based upon the systematic gathering of valuable business and investment information directly over the Internet from accredited members.

ChangeWave surveys its Alliance members on a range of business and investment research and intelligence topics, collects feedback from them electronically, interprets and reconciles the information in a cohesive manner and converts the information into valuable quantitative and qualitative reports.

The Alliance has assembled its membership team from senior technology and business executives in leading companies of select industries. Nearly 3 out of every 5 members (58%) have advanced degrees (e.g., Master’s or Ph.D.) and 94% have at least a four-year bachelor’s degree.

The business and investment intelligence provided by the Alliance provides a real-time view of companies, technologies and business trends in key market sectors, along with an in-depth perspective of the macro economy – well in advance of other available sources.

IV. About ChangeWave Research

ChangeWave Research, of Phillips International, Inc. is a market research intelligence network powered by thousands of accredited and organized front-line professionals – the ChangeWave Alliance.

ChangeWave is the alternative to traditional “sell-side” investment research. The company publishes ChangeWave Investing, the investment advisory service for individual investors dedicated to researching and discovering growth stocks that profit from radical change, and Weekly WaveWire, a free e-mail newsletter distributed to over 200,000 investors.

ChangeWave has a very unique asset in its 4,000-member Alliance. We have assembled our membership team from a broad cross section of more than 20 vertical markets such as Internet e-commerce, semiconductors, data storage, and biotechnology, along with a wide range of professional disciplines including CIOs, IT managers, executive management, scientists, engineers and sales personnel.

The ChangeWave Alliance is composed of senior technology and business executives in leading companies – credentialed professionals who spend their everyday lives working on the frontline of technological change.

ChangeWave Research Reports provide a real-time view of companies, technologies and business trends in key market sectors along with an in-depth perspective of the macro economy – well in advance of other available sources. ChangeWave surveys its 4,000 Alliance members on a wide range of investment research topics and converts the findings into valuable investment and business intelligence reports. ChangeWave delivers its products and services on the Web at

ChangeWave Research does not make any warranties, express or implied, as to results to be obtained from using the information in this report. Investors should obtain individual financial advice based on their own particular circumstances before making any investment decisions based upon information in this report.

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