Enterprises to Bump Up IT Spending in 2019 - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
IT Leadership

Enterprises to Bump Up IT Spending in 2019

A Spiceworks survey reveals an air of confidence among IT buyers who see IT budgets going up to improve infrastructure and security.

Maybe it's time to clear that coat of dust off the IT department's checkbook. It seems like the better part of a decade that we've been hearing the same complaints: The C-Suite wanted IT to innovate and secure the company's data, while IT was stuck with flat or declining budgets that were eaten up by maintenance more often than forward-looking technologies.

Image: Pixabay
Image: Pixabay

Finally, there seems to be good news on the budget front, according to a survey by infrastructure tools provider Spiceworks, released this morning. There is real budget growth in the works. In fact, 89% of more than 700 IT buyers in the US and Europe reported that they expect their budgets to grow or remain stable in 2019. More significant is the data showing that 56% of large companies (5,000 employees or more) are projecting IT budget growth. Only 6% of all companies -- mostly smaller organizations -- are predicting reduced budgets.

For too long now, CEOs and boards of directors haven't put their money where their mouths are. Oh, they talked a good game when it came to technology, claiming that they wanted their organizations to be "data driven," "secure," "innovative," and "customer centric." Their mandates fell on the CIO and the IT team, but such mandates often weren't backed by cash, the money needed to upgrade or replace systems.

The corporate mindset seemed to be, "You can save money if you just move things to the cloud." True, cloud migrations can bring savings, but they aren't a cure-all.

Three key themes underlie the fresh budget figures: better revenue performance, the need to upgrade IT infrastructue, and security/regulations. Companies with more than 1,000 employees are most likely to see growth in company revenue, and some of that is being invested in infrastructure.

"What are the driving forces causing companies to build up their IT spending? Most companies (64%) are ramping budgets so they can upgrade outdated IT infrastructure, but the need to shore up aging hardware varies by industry and company size," said the Spiceworks report. "For example, 82% of government organizations across North America and Europe said they’re expanding IT budgets due to outdated IT infrastructure, which is significantly higher than in any other industry. This makes sense considering some government organizations, such as the National Health Service in the UK, pledged millions to improve and protect their infrastructure following cybersecurity attacks like WannaCry."

Some other key data points:

  • Spending on software (26% of budget) and cloud (21%) are expected to remain stable
  • Hardware spending is expected to be down to 35% across all company sizes, but only 26% in big companies. (That includes desktop, networking, climate, and mobile hardware, not just data center equipment).
  • Large companies expect to spend 46% of their IT budgets on managed services and cloud/hosted services.

The report concluded, "When it comes to the budgetary bank, 2019 will see business revenues rise. IT budgets will also increase or stay steady, with large enterprises seeing the biggest boost. As companies bulldoze outdated technology, they’re also safeguarding their infrastructure by investing more in a fundamental cornerstone: security."

Jim Connolly is a versatile and experienced technology journalist who has reported on IT trends for more than two decades. As editorial director of InformationWeek and Network Computing, he oversees the day-to-day planning and editing on the site. Most recently he was editor ... View Full Bio

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
Slideshows
What Digital Transformation Is (And Isn't)
Cynthia Harvey, Freelance Journalist, InformationWeek,  12/4/2019
Commentary
Watch Out for New Barriers to Faster Software Development
Lisa Morgan, Freelance Writer,  12/3/2019
Commentary
If DevOps Is So Awesome, Why Is Your Initiative Failing?
Guest Commentary, Guest Commentary,  12/2/2019
White Papers
Register for InformationWeek Newsletters
State of the Cloud
State of the Cloud
Cloud has drastically changed how IT organizations consume and deploy services in the digital age. This research report will delve into public, private and hybrid cloud adoption trends, with a special focus on infrastructure as a service and its role in the enterprise. Find out the challenges organizations are experiencing, and the technologies and strategies they are using to manage and mitigate those challenges today.
Video
Current Issue
Getting Started With Emerging Technologies
Looking to help your enterprise IT team ease the stress of putting new/emerging technologies such as AI, machine learning and IoT to work for their organizations? There are a few ways to get off on the right foot. In this report we share some expert advice on how to approach some of these seemingly daunting tech challenges.
Slideshows
Flash Poll