Soft market to hurt Interop?

Interop convenes next week under the pall of soft US enterprise spending and the resultant drag on network financials.

Juniper is the latest to feel the weight of the sluggish market. The company just posted a solid quarter that exceeded Wall Street expectations, but it was due mostly to sales to service providers. Juniper's Service Layer Technology group, comprised mostly of enterprise products like the NetScreen VPN gear, was down 9% sequentially due especially to softness in federal government sales.

Extreme, meanwhile, was downgraded by JMP Securities this week after posting a disappointing fiscal third quarter. Extreme blamed the miss on customers delaying purchases.

Extreme's downgrade follows those of Cisco and Foundry earlier this month, again based on weak spending among US enterprises.

IT spending has already reached recessionary levels, according to research firm ChangeWave. A ChangeWave survey of 2,013 officials in charge of IT spending at their organizations found that 23% expect their company’s spending to decrease in the second quarter of 2008, while 15% expect it to increase. Last year, the firm found that 32% expected an increase while 12 % expected a decrease.

ChangeWave says this is the first time since August 2001 that one of its surveys – taken at the mid-point of each quarter – projected negative spending growth in IT.