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Wendover-Global Insight IT Spending Index: Robust IT Spending Expected To Continue

Haverford, PA, October 14, 2005 -The Wendover-Global Insight IT Spending Index for Q3 2005 dropped a slight 1.1% versus the previous quarter, but the continued high level of spending portends a continued bright outlook for IT (Figure 1). While levels remain below historical highs, Index values clearly indicate that IT spending remains robust and should continue to enjoy favorable prospects for the balance of 2005. In fact, year over year, the Index climbed 52.6% (Figure 2).

Survey results for the third quarter of 2005 indicated positive quarter-over-quarter growth in many hardware and software categories. In addition, various industries declared their intentions to increase spending on IT products. Prospective spending in Accounting and Finance software posted strong gains as firms continue to work towards meeting Sarbanes-Oxley compliance; the Finance industry likewise maintained a high level of prospective spending in efforts to meet the new Federal accounting guidelines. Since the SEC has recently granted a year-extension, these categories are expected to continue to perform well.

In other categories, Disaster Recovery software witnessed double-digit growth for the second consecutive quarter, but Firewall Protection software saw a modest decline after enjoying six months of growth. Both the Health Services industry and Education and Social Services saw spending prospects fall for the second quarter in a row. Legal Service and Insurance companies IT spending expectations had little movement either up or down in the third quarter from the previous quarter.

The Wendover-Global Insight IT Spending Index measures the intentions of IT decision-makers to invest in new capital projects, typically purchases that will close in the next six to nine months. Wendover Corporation completes 133,000 surveys annually with IT decision-makers at 80,000 of the largest corporations throughout the U.S. and the United Kingdom, including every Fortune 500 corporation.

The overall Index is pegged at 100 points in Q4 1999 while the spending category and industry indices are based to 100 in Q2 2001. Surveys conducted since then have generated 24 quarters of historical data. The IT Spending Index is published monthly through a partnership of the two companies, Wendover Corporation and Global Insight, Inc.

Wendover-Global Insight IT Spending Index - Q3 2005

Industry Outlook -

Maintenance/Facilities software spending inched up less than 1% in the third quarter but was up more than 10% year over year, while Human Resources software spending grew 4.5% in the third quarter and 30.7% year-over-year (Figure 3).
Both CRM and ERP software witnessed small declines during Q3, 0.5 and 9.0% repectively, but both enjoyed large gains over the same period in the previous year - 36.2% and 11.2%, respectively (Figure 4).
The Wholesale Trade industry has been investing heavily in IT, up 72.6% year-over-year, but Retail Trade IT spending has been depressed for an extended period, down 17.8% from the same period last year and showing a double-digit decline from last quarter (Figure 5).
The Manufacturing and Contractors & Construction industries are two of the fastest growing spenders in IT during recent months with posted gains of 45.3% and 78.5%, respectively, over the same period last year (Figure 6).

In addition to distributing the IT Spending Index to the public at no cost, Wendover Corporation provides research clients with more segmented analysis from the same database. Global Insight provides its clients with broader market analysis that incorporates the IT spending data along with other business intelligence and market projections. Note:
An Index analysis, FAQs about the survey methodology and the Index, and other information are available at: http://www.itforecast.com/ and http://www.globalinsight.com/itindex

Global Insight Contact:
John Bauman (610) 490-2668
john.bauman@globalinsight.com

Vicki Van Mater (703) 251-4575
vicki.vanmater@globalinsight.com

Wendover Corporation Contact:
Larry Dillon (610) 642-5280
1@wendovercorp.com

Wendover Corporation (http://www.itforecast.com/) is a private, 16 year-old, IT business intelligence firm located in Haverford, PA. The firm completes 133,000 surveys annually with IT decision-makers at 80,000 of the largest companies throughout the U.S. and the United Kingdom, including every Fortune 500 business.

Global Insight, Inc. (http://www.globalinsight.com/) is a privately held company formed to bring together the two most respected economic and financial information companies in the world, DRI and WEFA. Global Insight provides the most comprehensive economic and financial coverage of countries, regions, industries and markets available, using a unique combination of expertise, models, data and software within a common analytical framework to support planning and decision-making. With its April 2003 acquisition of World Markets Research Centre, Global Insight also provides the world's first same-day analysis and risk assessment service covering 185 countries and 4 industries, providing insightful analysis of market conditions and key events around the world. The company has over 3,800 client organizations in industry, finance and government with revenues in excess of $80 million, over 600 employees and 23 offices in 12 countries covering North and South America, Europe, Africa, the Middle East and Asia.


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