IT budgets set to grow next year

Security and end-of-life concerns drive increased spending

IT professionals can look forward to a little spare cash in their pockets next year, as almost half of organisations are expected to increase their IT budgets.

That's according to SpiceWorks' annual State of IT report, which is based on surveying the company's robust community of IT practitioners about their priorities for the coming year. The most recent report stated that 44% of businesses are planning to increase their IT spending, up 6% from the previous year. The average increase is expected to be around 18%. 

This increase was consistent across both Europe and North America, as well as across company sizes, with everyone from microbusinesses to multinational giants reporting broadly similar levels of growth. The biggest driver of this increased spending is set to be outdated infrastructure, with 64% of overall respondents reporting that as the main factor for increases in budget. The looming end of extended support for Windows Server 2008 was cited as a key reason for this, and according to the report, servers will make up almost 15% of projected IT spending in 2020.

"There's a lot of outdated infrastructure," said Spiceworks senior technology analyst Peter Tsai. "We're seeing the end of life for Windows 7 and Server 2008 obviously influencing it. And then individually, we asked about factors leading to spending increases and the need to update infrastructure was top. Security concerns were also top, so you can infer that end of life has a lot to do with it."

For large enterprises, regulatory changes and higher prioritisation of IT projects were also major factors, but this was not the case for smaller organisations. For organisations up to 500 people, growing employee headcounts and old infrastructure remained the primary drivers, with only 10% of businesses in this category citing a recent security incident as a motivating factor for budget increases. This is compared to one in four businesses with over 1,000 employees.

Interestingly, although hardware expenses will still claim the lion's share of IT budgets next year with 33%, this figure is actually down slightly on last year's report. End-user hardware, in particular, will take up 22% of total spending.

The report also looked at the adoption trends for forthcoming technologies, and found that while only 17% of European respondents have deployed AI within their business, 34% were planning to deploy it within two years - the same amount as IT automation, and just behind gigabit Wi-Fi.

"Automation is kind of a broad term," Tsai said. "I think a lot of our audience would think about tools like PowerShell, or scripting languages, or programming languages as a form of automation, with PowerShell being the dominant one among our audience."

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