Deep pockets mean big-time investing for technology companies.

According to the most recent survey of tech company chief investment officers by Goldman Sachs, internet technology spending decreased slightly from the last reading in December 2017, when spending intent was the strongest on record. However, the June 2018 reading shows that spending intent remains at the third-highest level since Goldman began the survey in 2002 with an IT spending index reading of 80. IT spending is also well above the five-year average of 71. The IT capital spending index also ticked down slightly to 76, down from a record high of 86.5 in June 2017.

Source: Goldman Sachs

So where are the big players in technology spending all this money? According to Goldman, the top priorities are security, software as a service (SaaS), analytics and the private and public clouds. About 10.4% of CIOs planned to increase security spending, up from 10.1% at the previous reading. Second place went to SaaS, with 7.6% of CIOs planning to increase spending.

Source: Goldman Sachs

Here's a look at tech spending by the numbers.


When it comes to software spending, the big three come as little surprise. Leading the pack are Inc. (AMZN) - Get Report and its Amazon Web Services platform, followed by Microsoft Corp. (MSFT) - Get Report and its Azure product and Alphabet Inc. (GOOGL) - Get Report , respectively.

Overall, Goldman said public cloud software adoption "remained relatively stable" in the first half of this year. Chief investment officers surveyed suggested they will continue to slow spending on virtualization, databases, operating systems and middleware, but will do so at a slower pace than in the recent past.

As far as business intelligence and analytics software is concerned, 48% of surveyed CIOs expressed that they foresee Microsoft growing the most in strategic importance. About 37% of CIOs said the same about Amazon Web Services and 33% about Tableau Software Inc. (DATA) - Get Report . That shift in strategic leadership could be "to the detriment" of some legacy players including Oracle Corp. (ORCL) - Get Report , SAP SE (SAP) - Get Report and Teradata Corp. (TDC) - Get Report , Goldman wrote.

Hardware & Networking

Goldman analysts found that storage spending expectations among the top tech firms decreased modestly throughout the first half of 2018, although personal computer spending expectations "strengthened meaningfully."

Specifically in networking, Cisco Corp. (CSCO) - Get Report and F5 Networks Inc. (FFIV) - Get Report gained significant market share, while Arris Ltd., Arista Tech, Dell EMC, Juniper Networks Inc. (JNPR) - Get Report and Hewlett Packard Enterprise Co. (HPE) - Get Report are expected to lose share as a result.

IT Services

Discretionary spending in IT remained strong, in line with previous readings. International Business Machines Corp. (IBM) - Get Report led the pack in spending, but notable gainers included specialized digital engineering vendors like EPAM Systems Inc. (EPAM) - Get Report , Luxoft Holding Inc. (LXFT) - Get Report and Globant SA (GLOB) - Get Report , plus some smaller Indian vendors, Goldman said.

Security Software

Goldman's findings suggest a "solid demand environment" for security software moving into the back half of the year. Endpoint, analytics and identity software remains "top of mind," while firewall spending intentions were "more robust" than Goldman expected.

Only 9% of tech CIOs said they plan to reduce appliance spending over the next three years. Goldman said that's good news for Microsoft, Cisco, Palo Alto Networks Inc. (PANW) - Get Report and Fortinet Inc. (FTNT) - Get Report as far as wallet share is concerned. Conversely, checkpoint Software Technologies Ltd. (CHKP) - Get Report , Symantec Corp. (SYMC) - Get Report and McAfee could lose out.

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