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Spiceworks Survey: Tech Spending Expected to Rise as IT Budgets Stabilize in 2018

Tech Spending Expected to Rise

Market optimism drives growth and adoption of emerging technologies like IoT, AI, and VR

AUSTIN, Texas, Oct. 11, 2017 (GLOBE NEWSWIRE) — Today at SpiceWorld 2017, Spiceworks announced the results of its 2018 State of IT report, a study examining the technology budget and adoption trends of organizations in North America and Europe. According to the results, IT budgets in 2018 are expected to stabilize, and in many cases grow, as many organizations plan to hire more IT staff and increase their adoption of emerging technologies, such as artificial intelligence (AI), Internet of Things (IoT), and virtual reality (VR) solutions. The results also indicate budgets for cloud-based services are on the rise, and nearly tied with software spend, due to organizations’ needs to provide access to data anywhere across the globe.

In 2018, 44 percent of companies expect their IT budgets to increase while 43 percent expect budgets to remain flat. Only 11 percent of companies expect IT budgets to decrease. Among companies that anticipate budgetary gains, they expect a 19 percent increase in IT budgets on average. As budgets stabilize, 45 percent of companies plan to hire more IT staff to manage new hardware, software, and services. Larger companies are expecting the biggest increase in IT staff. Sixty-two percent of enterprises with 1,000 to 4,999 employees and 70 percent of companies with more than 5,000 employees report they’ll hire more IT professionals in 2018.

(Image Source: Spiceworks)

Adoption of emerging technology in the workplace is on the rise

When examining the adoption of the latest technology trends, the results show emerging technologies, such as IoT, VR, and AI, are becoming more prevalent in the workplace. Currently, 29 percent of organizations have adopted IoT while 18 percent have adopted VR and 13 percent have adopted AI technology.

In the next 12 months, adoption of emerging technologies is expected to increase significantly to 48 percent, 32 percent, and 30 percent for IoT, VR, and AI, respectively. Adoption of emerging technologies is even higher in larger organizations. In fact, about 30 percent of organizations with more than 1,000 employees have adopted both VR and AI, and an additional 25 percent plan to adopt the technologies in the next 12 months.

Among other notable trends, the results show 43 percent of organizations have adopted IT automation and another 22 percent plan to implement it next year. Additionally, in the wake of recent security breaches, 38 percent have adopted advanced security solutions, such as encryption, breach detection, and biometrics, while another 28 percent plan to adopt them in the next 12 months.

Budgets for cloud services are catching up with hardware and software budgets

(Image Source: Spiceworks)

Although IT professionals plan to spend a majority of their 2018 IT budgets on hardware and software, organizations expect to spend nearly as much on hosted/cloud-based services. When asked how their budgets would be allocated in 2018, IT professionals said 31 percent of their budgets have been allocated for hardware, 26 percent for software, 21 percent for hosted/cloud-based services, and 15 percent for managed IT services.

In fact, among hardware, software, cloud services, and managed services, the highest percentage of businesses (55 percent) reported an increase in cloud budgets, especially enterprises. Sixty-six percent of companies with 1,000 to 4,999 employees and 72 percent of those with more than 5,000 employees reported an increase in hosted/cloud budgets. In terms of what’s driving more companies to the cloud, the results show 42 percent are moving to the cloud to provide access to data anywhere, while 38 percent are looking to enhance their disaster recovery capabilities, and 37 percent want to enable better flexibility and scalability.

Budget highlights within each category include:

  • In hardware, budget allocations for desktops and laptops are nearly tied at 16 and 15 percent, respectively. Thirteen percent of hardware budgets will also be spent on servers, followed by networking devices (8 percent), tablets/mobile devices (7 percent), and security appliances (7 percent).
  • Top software budget allocations include operating systems at 11 percent, followed by security software (10 percent), productivity software (10 percent), and virtualization (9 percent).
  • Online backup and recovery leads spending in hosted/cloud-based services. Fifteen percent of cloud budgets are allocated towards online backup/recovery, followed by online productivity solutions (10 percent), email hosting (9 percent), and web hosting (9 percent).
  • In managed services, 11 percent of budgets will be spent on managed hosting, followed by managed storage/backup (9 percent), managed hardware support and maintenance (9 percent), and managed security (9 percent).

“Many businesses are feeling optimistic about the current state of the economy, and as a result, we can expect them to spend a bit more freely when it comes to their IT purchases in 2018,” said Peter Tsai, senior technology analyst at Spiceworks. “Not only are budgets expected to increase across hardware, software, and services, companies have indicated they’re also more willing to invest in emerging tech like IoT, AI, and VR. And with IT staffing levels on the rise, some organizations will be better equipped to evaluate promising tech and plan for the future.”

Methodology

The survey was conducted by Spiceworks in July 2017 and included 1,003 respondents from North America and Europe. Respondents are among the millions of IT professionals in Spiceworks and represent a variety of company sizes including small-to-medium-sized businesses as well as enterprises. Respondents come from a variety of industries including manufacturing, healthcare, non-profits, education, government, and finance. For more information and a complete list of survey results, visit https://www.spiceworks.com/marketing/state-of-it/report/.

About Spiceworks Voice of IT

Spiceworks’ Voice of IT shares statistics, trends, and opinions collected from millions of IT professionals on the global technology issues that are important to them. For other Spiceworks Voice of IT reports and snapshots visit: https://www.spiceworks.com/research/.

About Spiceworks

Spiceworks is the professional network millions of IT professionals use to connect with one another and thousands of technology brands. The company simplifies how IT professionals in the $3 trillion IT industry discover, buy, and manage technology products and services each year. Headquartered in Austin, Texas, Spiceworks is backed by Adams Street Partners, Austin Ventures, Institutional Venture Partners (IVP), Goldman Sachs, Shasta Ventures, and Tenaya Capital. For more information, visit http://www.spiceworks.com.

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