First ACNielsen / VNU Global Tech Forum Survey Also Reveals:
Over 50% of companies in USA and Europe set to increase IT spend this year
Two in five companies in USA and Europe set to increase spending on Notebook computers
Use/adoption of Blackberry expected to jump 21 percent in UK this year
Future Investment for internet-related services higher in USA than Europe as savvy US companies demand higher ROI (return-on-investment).
12 May 2006
Despite a lower than expected quarterly earnings forecast from Dell this week, IT executives in the USA voted DELL the best IT equipment brand, believing the home grown all-American Dell still delivers better value for money than HP/Compaq and almost all other equipment brands, according to findings from an ACNielsen / VNU Global Tech Forum Survey released today. Across the Atlantic, European IT leaders voted HP/Compaq the leading IT equipment brand, with Dell taking second place.
“One in three IT executives in the USA and one in five IT executives in Europe have chosen Dell as their leading IT equipment brand. However, HP/Compaq – with its international image and global presence clearly holds poll position in Europe, despite Dell catching up quickly in second place in France and UK,” said Frank Martell, CEO and President ACNielsen Europe.
“The US is ultimately a value-driven society and Dell’s unique brand values around its ‘no corporate overhead’ and delivering its IT solutions directly to the customer greatly appeal to US corporations”.
Europeans on the other hand, appreciate heritage in an IT brand – as well as an international reputation and a global presence. “Most senior IT executives in Europe started their careers exposed primarily to Hewlett Packard and IBM and have developed long standing trust and association with these two brands. HP/Compaq is also perceived as the all-end solution provider, an important consideration for European corporations,” said Martell. It’s paramount for IT companies to know and understand what brand values appeal most to customers in different global regions – these key factors will influence purchasing decisions,” said Martell.
In the first IT Brands survey of its kind, senior IT executives rated leading leading IT companies on their brand values and a variety of factors that influence purchasing decision.
“Every IT equipment company in the world sells a similar range of products – but they use their core brand to differentiate themselves and command a premium in this highly competitive industry,” said Martell.
Its certainly an interesting scenario to watch. The race between Dell, the world’s largest PC maker and HP/Compaq intensified this week as Dell lowered its quarterly forecast earnings amid news that is losing US market share. Meanwhile, in the last twelve months HP/Compaq has gained market share both in the USA and globally. “We can expect both Dell and HP/Compaq to place greater emphasis on their core brand values in their forthcoming marketing and advertising campaigns,” predicts Martell.
“Our survey tells us that when companies buy Dell, they are buying into the brand’s core values of value-for-money and outstanding customer service. When they buy HP, they are buying into its global reputation and its track record for reliability - and when they buy IBM, they believe they are buying a highly reputable, top quality brand and are willing to pay the price for it.
The ACNielsen IT Growth and Brand Positioning Study – a survey conducted among 1680 senior IT decision-makers in US and European companies identified two common attributes that are equally valued by US and European IT leaders. Firstly, the expectation that an IT equipment partner should be a one-stop-shop for their IT needs and secondly, that they should offer outstanding service/support. “There the differences stop, however,” pointed out Martell. “European companies place great value on reliability and high quality, while US companies value an IT brand that is fast growing, improving and offers high security features.”
“To maintain their leadership position and safeguard their future in Europe, HP/Compaq needs to maximize its current leading position among the next generation of IT leaders. Dell currently has the second highest brand equity in all European countries except Germany, so HP/Compaq needs to recognize its perceived value deficit and work at capitalizing on the brand values that are winning them favour with today’s leaders – heritage, trust and familiarity. “Selling these brand values the next generation of IT leaders is the only way that HP/Compaq will maintain its leadership position in Europe,” noted Martell.
And never underestimate the power of local brands either. In Germany, while HP/Compaq takes poll position, leading local brand Fujitsu-Siemens takes second place, followed by Dell.
US and Europe IT Expenditure
More than 50 percent of US and European companies expect their IT expenditure to increase this year – mainly in the areas of Notebook computers and Internet-related services - while one in three companies say their IT spend will remain about the same.
“After a couple of tough years for IT equipment companies, our survey results indicate a generally positive turnaround for the IT industry in USA and Europe. It’s certainly good news for manufacturers of notebooks and companies offering internet-related services as these were the two main areas of growth and investment chosen by our executive panel of IT decision makers in multinational companies,” said Martell.
Overall, most confident among the US and European nations are the Spanish and Dutch – 73 percent of Spanish senior IT executives and 67 percent of Dutch said they expected their IT spend to increase this year. British and Belgian companies were also optimistic. Meanwhile French and German companies – bearing the brunt of economic stagnation in Europe - not surprisingly remain the most pessimistic. With a response that directly reflects the uncertain state of their economy, one in four French senior IT executives said they simply “didn’t know” what their IT investment was likely to be this year.
Two in five companies in the US and Europe expect to increase expenditure on notebook computers. 40 percent of US companies also expect to increase spend on Internet services and web-enabled applications, compared to 33 percent of European companies.
The demand for notebooks is mainly driven by the increasing need for mobility and flexibility in today’s working life. “Compared to a few years ago, executives are working away from the office a lot more, either on the road or working from home. Notebooks – along with internet services such as wireless internet - allow for greater working flexibility which employers recognize as positively impacting productivity. As notebooks become cheaper and more affordable, we can expect to see more companies replacing desktops with notebook computers,” observed Martell.
Within Europe, Spanish (58%), Dutch (55%) and Belgian (49%) companies are preparing to invest in notebooks.
Blackberries – set to conquer the UK
The survey also brought good news to Research In Motion, the maker of the Blackberry – which can expect to see a rapid adoption rate in UK in the next year, although in other parts of Europe adoption rates look to be considerably lower and slower. Nearly one in five British companies surveyed said they intended to adopt and integrate Blackberries into their business in the next year.
“The popularity of mobile email among the British - who work the longest hours in Europe - is about to take off. The need for a mobile office is also most evident in the UK, where perception of ROI for wireless internet is the highest at 48 percent - compared with 25 percent in the USA and 26 percent in Europe.
The Blackberry is clearly the most entrenched executive must-have mobile accessory in the US where ROI perception is 51 percent, considerably higher than only 21 percent among European companies.
IT ROI differences in USA and Europe
The survey also highlighted a significant difference in IT ROI expectations between European and US companies. According to the survey, European firms are less likely than US firms to perceive a benefit on ROI from notebooks, PDA’s and Blackberries.
“US firms have traditionally been more demanding in deriving quantifiable ROI from specific technologies, and ROI measurements in IT are currently more sophisticated in the US. We expect this perception to change among European companies in the next couple of years, however IT vendors in Europe should interpret this as a call for them to become more educated and market savvy.
Ironically, while Belgian and Dutch companies are preparing to invest heavily in most areas of IT equipment and especially in internet related services, more than any other European country they are the ones who currently have the lowest ROI expectations, with just over 10 percent of companies there saying that current ROI “exceeded expectations,” according to the survey. “HP/Compaq currently dominate and are ‘top of mind’ for IT executives in Belgium and Holland – there’s clearly an opportunity here for HP/Compaq to educate the market on ROI and IT investment opportunities,” said Martell.
ACNielsen, a VNU business, is the world's leading marketing information provider. Offering services in more than 100 countries, the unit provides measurement and analysis of marketplace dynamics and consumer attitudes and behavior. Clients rely on ACNielsen's market research, proprietary products, analytical tools and professional service to understand competitive performance, to uncover new opportunities and to raise the profitability of their marketing and sales campaigns.