MENLO PARK, Calif. (CNN/Money) -
I've written often that buyers of technology products are moving from a must-have mentality to a nice-to-have mentality.
The not-so-subtle investment implication from this somewhat subtle observation is that, over time, stock pickers will need to temper their enthusiasm for technology stocks.
Now new research from the preeminently independent firm Bernstein Research bolsters the argument.
At first blush, the recent report from Bernstein strategist Vadim Zlotnikov and hardware analyst Toni Sacconaghi is merely yet another survey of chief financial officers (CFOs) and chief information officers (CIOs) about their views on technology purchases.
Dig a little deeper and the insights are longer-term in nature.
The worry in tech
Zlotnikov and Sacconaghi (try saying that five times fast) report that CFOs on average expect spending on information technology to be up about 3 or 4 percent this year, lower than the 7 percent increase they were forecasting at the beginning of the year.
Their reasons? They are spending more of what cash is lying around on acquisitions and eliminating debt from their balances sheets than they are on gizmos to help the business run better.
What's more, with deflation still a fear in industrial America, the CFOs first want to see indications that they'll be able to recoup their capital investments in the form of higher prices.
As for technology spending, the Bernstein results revealed how CFOs in particular really feel. In short, technology is neato, but they're not about to buy it if the return isn't obvious.
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"Despite modest plans for IT spending, CFOs remain positive on the longer-term role of technology: most view IT as a key enabler of market share gains and expect IT to gain share of capital spending," the duo writes. "Few, however, appear willing to pay for (or perceive the need for) leading edge technology."
That's just not great news for folks who hope to sell cutting-edge equipment to big spenders on information technology.
The open question is whether this attitude is short-term in nature or if a generation of CFOs and CIOs have soured on the notion of having to have the latest thing. How you answer that question may well dictate how you invest in tech.
Bottomline-let: Maturing tech markets
The Wall Street Journal flat-out compared Silicon Valley with Detroit on Friday in a boffo piece on how the Wi-fi craze has been co-opted by biggies like Cisco and Intel.
"Technology has settled into a more traditional cycle of innovation that in a general way resembles how Detroit auto makers absorb design advances from California custom-car shops," the Journal writes.
If folks in my neighborhood read that sentence carefully they'll be just as annoyed as they (still) are by the Harvard Business Review's "It Doesn't Matter" article. The Journal is right, of course. But people still don't want to believe it.
Adam Lashinsky is a senior writer for Fortune magazine. Send e-mail to Adam at lashinskysbottomline@yahoo.com.
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