Market Overview

Instinet On CIO Spending: Switch To Cloud 'Already Evident'


The coronavirus is now impacting how chief investment officers set their spending budgets as the majority of those surveyed by Instinet suggest a decline in IT spending in 2020.

The Analyst

Jeffrey Kvaal and other Instinet analysts discuss findings from a semi-annual CIO survey.

The Thesis

Instinet surveyed 50 CIOs in March and 40 answered after March 11, marking a period before "full lockdowns hit" but well after social distancing started. Only 34% of those who responded expect the coronavirus to have zero impact on spending, 20% are looking to pull forward or accelerate spending. The remaining 46% expect to slow spending by more than 10%.

The results also show that CIOs expect to reduce their mix of on-premise workloads from 59% in 2019 to 35% in 2021. Some of these workloads are likely to switch to a private cloud platform although a higher load will be destined to the public cloud. The coronavirus pandemic appears to have accelerated the migration towards the cloud.

Other findings from the survey include an incremental focus on security and reducing overall capex and opex, the analyst wrote. Top sources of funding were PCs at 68%, followed by artificial intelligence (48%), servers (48%) and ADCs (40%).

Based on the results of the survey, stocks that offer exposure to public clouds will "emerge stronger" from the coronavirus crisis. Preferred cloud ideas include Microsoft Corporation (NASDAQ: MSFT) and, Inc. (NASDAQ: AMZN).

Related Links:

Analyst Says Microsoft Is Relatively Well-Positioned For A Crisis

This Economist Projects 3 Quarters Of GDP Contraction In Coronavirus Recession


Related Articles (AMZN + MSFT)

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Posted-In: cloud Coronavirus Jeffrey KvaalAnalyst Color Analyst Ratings Tech

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