IT Spending Forecast Remains Mixed Despite Overall Revenue Surge

IT Spending Forecast Remains Mixed Despite Overall Revenue Surge

While business revenues are expected to increase for a clear majority of companies next year, IT budget growth projections are more conservative, according to a recent survey from Spiceworks. The resulting report, titled “The State of IT 2019,” indicates that roughly one-half of organizations will keep next year’s tech budget “as is,” although far more businesses will see increases as opposed to decreases. In terms of spending priorities, the upgrading of outdated IT infrastructure tops the “to do” list, followed by tech projects overall and improved security. More than 700 business technology buyers in North America and Europe took part in the research. The following slide show presents survey highlights, with charts provided courtesy of Spiceworks.

Company Revenues Projected to Rise

Nearly three of five respondents expect that their organization’s business revenue will increase next year. Only 7 percent anticipate a revenue decline.

IT Budget Forecast Presents Mixed-to-Positive Findings

Just over one-half of survey respondents expect their IT budget to remain the same in 2019 as it is now. However, 38 percent of respondents predict that their IT budget will increase next year, compared with just 6 percent who anticipate a decrease.

Infrastructure Updates Lead Spending Priorities

The need to upgrade outdated IT infrastructure ranks No. 1 among budget increase drivers, as cited by 64 percent of respondents. An increase in the prioritization of tech projects and security concerns tied for second, with both cited by 56 percent of respondents.

Organizations Eye Expanded Tech Staffing

The need to increase tech employee headcount is also driving IT budget increases, as cited by 43 percent of respondents. Other top budget-growth considerations include regulatory change (as cited by 37 percent of respondents), the need to increase business revenue (30 percent) and corporate tax cuts (12 percent).

Hardware Tops Tech Spending Categories

On average, hardware will account for 35 percent of the enterprise IT budget in 2019. Software will account for 26 percent of the budget, and hosted/cloud-based services will account for 21 percent.

Desktops Still in High Demand

On average, desktops will account for 18 percent of hardware spending. Laptops will account for 17 percent and servers will account for 12 percent.

Software Funds to Support OSes, Virtualization, Productivity and Security

On average, operating systems will account for 12 percent of software spending. Virtualization, “productivity” software and security tools will account for 10 percent each.

Cloud Viewed as Major Backup Plan

On average, online backup/recovery services will account for 15 percent of the hosted/cloud budget. Email hosting will account for 11 percent, and productivity support along with web hosting will account for 9 percent.

‘End of Life’ Issues Bring Purchase Opportunities

Fifty-seven percent of respondents said “end of life” issues are driving new hardware, software and/or service purchases. Just over one-half indicated that upgrades/refresh cycles and growth/additional needs are driving these purchases as well.

Purchases Receive CEO and Business-Side Input

Tech purchase decisions are frequently receiving input from the very top of the executive ladder, with 38 percent of respondents revealing that their CEO/president is involved in these decisions. About three of 10 said business line directors, finance/procurement execs and business-line managers are involved too.