Its early in the quarter to draw conclusions, but the first wave of earnings statements for Q3 had a mixture of good and bad news.

In the net, I’d call it mildly negative vs. where we thought we were in August. The model slipped -0.1% to -6.6% for 2009. The 2010 model declined to +3.1% from our August estimate of +3.7%.

Lawson, Red Hat, and Tibco met or exceeded the midpoint of their guidance or our estimate of their revenue. Adobe and Accenture came in a little higher than expectation, but both have been very weak all year.

Expected vendor revenue doesn’t translate directly into spending, but it is highly correlated with it.  A handful of storage system vendors (EMC, HP, NetApps, and Dell) report their storage businesses fairly unambiguously – which gives some guidance as to purchasing budget expectations going forward.  Collectively, the storage businesses (storage hardware, software, and services) of these four vendors grew +10% worldwide in 2008, will shrink -10% in 2009, and grow 1.7% in 2010.

This is against an expected overall market revenue growth of 3.6% for all IT products and services worldwide in 2010.

Overview – Ralph Finos Consulting estimates that 1H2009 WW IT Spending was -11.4%. Assuming that the July exchange rates are sustained throughout the 2H of 2009, the as-reported 2009 forecast is for a -6.8% decline for 2009 and a modest +3.9% recovery for 2010. We appear to have found the bottom. The revenues of 19 of 35 (54%) of IT vendor business units were short of the forecast estimates and/or the midpoint of vendor guidance (vs. 72% falling short in Q109. Currency has been an important factor (around a -7% impact – depending on the product) for Q1 and most of Q2). However, the comparative strength of the dollar in Q3 & Q42008 will be advantageous for vendors in Q3 & Q42009. As-reported YoY results should have much less of a currency drag than the 1st half and may be a Q4 kicker.

Intel

While Intel is not expressly in the IT Spending model – the results were hopeful. While some of the pop was probably inventory restocking, perhaps (we’ll learn on Wednesday) stealing some share from AMD, and perhaps consumer (vs. enterprise) interest, the signs are encouraging that we seem to be getting closer to the end of this thing. Using their Q3 guidance of ~$8.5M, they project out to -13% for 2009.

IBM Preview

My models have IBM’s Q209 coming in at: