U.S. corporate software spending continues to trend downward, according to a recent ChangeWave survey of 1,956 professionals involved with software purchasing in their company.

The April 8-15 survey results show deterioration in 2nd quarter corporate software spending with little relief in sight.

There was good news, however, on the virtualization front, with strikingly upbeat findings for virtualization software giant VMware and indications of momentum for Citrix.

Tough Time for Software
One-in-four respondents (25%) say their company will spend less for software over the next 90 days -- 3-pts worse than a previous ChangeWave survey in January. Only 12% say their company will spend more -- down 4-pts from previously.

What's behind this continuing pullback? A total of 13% of respondents cite "a general slowdown in business conditions and capital budgets" as driving their software spending decisions -- 4-pts more than in January and double the percentage of six months ago.

Respondents were also asked if there were any recent changes in their 2nd quarter capital budgets, and more than one-in-four (26%) said their budgets had been adjusted lower over the past 90 days. That's 4-pts worse than three months ago, and more than triple the percentage who say their capital budgets have increased (8%).

"This corporate software survey clearly shows that the spending downturn isn't over yet," said Tobin Smith, founder of ChangeWave and editor of ChangeWave Investing. "With the exception of virtualization firms, the forecast for corporate software makers remains gloomy."

Which software categories are bearing the brunt of the downturn?

Enterprise Resource Planning (ERP; Net Score = -11), Document and Enterprise Content Management (ECM; -9), and Customer Relationship Management Software (CRM; -6) are all seeing big declines in planned spending.

There is, however, increased corporate spending on Virtualization Software (+5) -- with VMware strengthening its domination over this market. So far this year, VMware's market share has risen 12-percentage points in ChangeWave's surveys (from 58% in January to 70% currently).

None of VMware's competitors have exhibited anything like this level of growth, although Citrix (26%; up 5-pts) has also shown a healthy jump in current share.

Looking at planned purchases for the next six months, VMware (73%; down 3-pts) towers over the rest of the market, with better than a four-fold lead over its closest competitors. But once again, Citrix (15%; up 8-pts) shows momentum going forward.