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July 9, 2008 8:53 AM

Vista, Office 2007 top CIOs' list of software projects to be delayed in tightened IT spending environment

Posted by Benjamin J. Romano

Goldman Sachs is out this morning with an extensive review of the software industry as second-quarter earnings begin rolling in next week. Broadly, the analysts see chief information officers -- CIOs -- tightening their belts.

"Our latest IT spending indicators suggest ongoing caution in 2008 spending plans on a year-over-year basis. CIO expectations of growth in budgets remains well below 1-year and 2-year ago levels," the analysts wrote.

Goldman asked CIOs in a survey last month, "Which of the following software-related projects are most likely to get delayed if your IT budget continues to tighten in 2H2008?"

Upgrades to Microsoft's flagship products, Windows Vista and Office 2007, topped the list, with 43 percent of respondents saying they would delay upgrading to Vista and 39 percent saying they would delay upgrading to Office 2007.

Despite that, Goldman writes, Microsoft's three huge product cycles "still remain in fairly early stages (Windows Vista, Windows Server 2008 and Office 2007) and while not immune to IT slowing, they do create some top-line momentum."

Microsoft reports its fiscal fourth-quarter and full-year results on Thursday, July 17, after the markets close.

Goldman expects Microsoft earnings per share for the year of $1.88, up 32 percent.

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