News

Rising IT Budgets Fueled by System Upgrades, Security Worries

• By Kurt Mackie
• September 26, 2019

A Spiceworks study published this week projects a likely increase in IT spending next year as organizations undertake infrastructure upgrades and tighten their security.

The study, "The 2020 State of IT," was based on a July 2019 survey of "1,005 business technology buyers" in North America and Europe. Of that number, 44 percent indicated that IT budgets were expected to increase in 2020. In comparison, just 38 percent had expected an IT budget increase in the prior-year study. Spiceworks is a company that offers marketing services, software and discussion forums for IT pros.

IT Budget Drivers
The top reasons for these increased IT budget beliefs, according to the survey respondents, included a "need to upgrade outdated infrastructure" (64 percent), "increased security concerns" (47 percent) and "employee growth" (47 percent), among others. The need to upgrade Windows 7 and Windows Server 2008 R2 by their January 2020 end-of-support dates was cited as an infrastructure upgrade driver by Peter Tsai, a senior technology analyst at Spiceworks.

The study found that the smallest organizations were most likely to allocate most of their software budgets to operating systems. The largest organizations were most likely to spend more on "virtualization, database management and communications software." A small organization was defined in the study as having one to 99 personnel. The largest organizations were defined has having more than 5,000 personnel.

Unsurprisingly, the top IT challenge, according to the study, was "keeping IT infrastructure up to date," per 50 percent of the respondents. Other challenges included balancing tasks (49 percent), upgrading software (46 percent), "following security best practices" (39 percent) and "convincing business leaders to prioritize IT" (32 percent).

Emerging Technologies
Perhaps the most interesting aspect of the study concerned the adoption of so-called "future technologies," which were defined as 5G wireless, artificial intelligence (AI), hyperconverged infrastructure, edge computing and serverless computing. Just 7 percent of the respondents indicated that their organizations used 5G, with 14 percent indicating plans to use it in 12 months, and 16 percent saying they had plans to use it in one to two years.

Hyperconverged infrastructure was used by 24 percent. Other "new" technologies used, per the respondents, included edge computing (20 percent) and serverless computing (15 percent).

AI was used by just 15 percent of the respondents, but 17 percent expect to use it in 12 months, with 10 percent saying adoption will happen in one to two years. Respondents particularly had high expectations for automation (42 percent), AI (32 percent) and Internet of Things (31 percent) technologies, per the study:

Most IT decision makers expect IT automation, AI technology, and IoT devices to have the biggest impact on their organization. In fact, over the last 12 months, IT decision makers have become more bullish on artificial intelligence: 32% believe AI will have the biggest impact on their organization, compared to 26% who said the same last year. This likely explains why adoption of AI-based technologies is expected to triple by 2021.

Adoption of the new technologies sometimes varied by industry segment. For instance, blockchain electronic ledger technology was used by 25 percent of financial services organizations.