Budgetary Bounty in 2018
Most companies across the globe will be keeping IT budgets steady, or giving them a boost over the next 12 months. In fact, close to half of companies (44%) expect budgets to increase while 43% anticipate no change at all. Only 11% expect to see their budgets decrease.
Companies that expect budgetary gains foresee a 19% jump in IT budgets, on average. Why such a positive outlook? An ever-increasing dependence on technology in the workplace could be one explanation for these sudden favourable winds.
Revenue on the rise and IT staffing looks up…
As economic trends continue upward, company revenues are expected to chart the same course. In fact, 60% of respondents expect their corporate earnings to increase in the coming year. And it’s likely business will allocate a good portion of that loot toward new tech, which means 2018 could be a swashbuckling good time for tech marketers.
Of course, it’s going to take more hands on deck to manage new hardware, software, and services. As a result, companies will be staffing up their trusty crew of IT pros throughout the year ahead.
Across the Seven Seas in 2018, more IT departments will swell in size than shrink. And the mega vessels (larger companies) forecast the biggest boost in staffing. More than 60% of companies with 500+ employees expect to increase IT, staff, while 70% of large enterprises (5000+) report they’ll hire more IT pros in 2018.
Lay of the Budget Land
It’s clear IT crews will have plenty to work within their 2018 coffers, but how can we expect to see budget play out on the open IT seas?
21% HOSTED & CLOUD-BASED SERVICES
15% MANAGED SERVICES
The lion’s share of the budget bounty will be spent on hardware (31%), with software (26%), hosted/cloud-based services (21%), and managed services (15%) rounding out the tech haul this coming year.
IT budget allocation in 2018 Total, Regional, and by Company size
When looking for differences among categories by company size, it appears the big outfits are more likely than smaller companies to allocate budget to managed services. Mid-size orgs (100-499 employees) are slightly less likely to invest in hosted/cloud-based services that both the largest and the smallest companies.
Although hardware and software will be staking claim to the largest share of budget territory in 2018, hosted/cloud-based services are closing in, and quickly grew into a formidable force. Among spending categories, the highest percentage of businesses reported an increase in cloud budget as compared to 2017. More businesses also reported a decrease in hardware budgets in the last year.
But the spend isn’t distributed evenly across all company sizes. For example, bigger fleets are more likely to report an increase in cloud spending than smaller companies. In fact, 66% of companies with 1,000-4,999 employees reported an increase in hosted/cloud budgets while 72% of companies with 5,000+ employees reported an increase.
How will the gold coins stack up?
To find out, we peered through our spyglass (with our one good eye) for a closer look under the lid of each main budget category.
Hardware haul: desktops (17%), laptops (15%), servers (13%), and networking (8%) fill up the biggest portion of IT budgets.
A curious trend: When looking at hardware budget breakdown by company size, smaller and mid-size outfits are more likely to invest in desktops in 2018. Larger companies are much more likely to invest in power and climate to help ensure smooth sailing in the server room.
11% OPERATING SYSTEMS
10% SECURITY SOFTWARE
10% PRODUCTIVITY SOFTWARE
Software haul: Operating systems (11%), security software (10%), productivity software (10%), and virtualization (9%) round out the top budget categories.
Looking at the cloud services budget breakdown by company size, smaller gangs will invest more in online backup and web hosting while midsize orgs will be setting their sales (pun intended) on IaaS and cloud-based security solutions. Larger crews report spending more of their cloud budget on PaaS.
12% MANAGED HOSTING
9% MANAGED STORAGE/BACKUP
9% MANAGED HARDWARE SUPPORT & MAINTENANCE
9% MANAGED SECURITY
Managed services haul: Managed hosting (12%), managed storage/backup (9%), managed hardware support and maintenance (9%), and managed security (9%) will be taking home the biggest portions of the budget bounty.
IT Trends on the Horizon
Cloudy with a chance of… more cloud Thanks to an increasingly mobile workforce, the potential for more collaboration across oceans, and the flexibility and scalability of cloud solutions, more workloads are being supported by cloud-based infrastructure services.
42% COMMUNICATIONS/ COLLABORATION
41% BACKUP/DISASTER RECOVERY
29% PRODUCTIVITY APPS
A few of the most common workloads supported by cloud infrastructure include communications/collaboration (42%), backup/disaster recovery (41%), and productivity apps (29%).
In terms of company size, the smaller outfits more often turn their rudders toward cloud infrastructure for communication and collaboration. Large companies (more than 1,000 employees) report greater use of cloud-based infrastructure to support software development, eCommerce, and R&D/engineering purposes.
When it comes to how companies foresee their workloads moving to cloud infrastructure over the next 12 months, communication/collaboration is top o’ the mast while backup/disaster recovery is close behind.
Companies with 1,000+ employees are shouting “cloud ho!” because they’re more likely to increase use of all cloud-based infrastructure services in the next 12 months. What factors are driving companies to steer towards the cloud? (sub-head)
42% ACCESS TO DATA ANYWHERE
38% DISASTER RECOVERY CAPABILITIES
37% BETTER FLEXIBILITY
36% REDUCING THE SUPPORT BURDEN ON IT STAFF
Top drivers for moving workloads to the cloud include providing access to data anywhere (42%), enhancing disaster recovery capabilities (38%), enabling better flexibility (37%), and reducing the support burden on IT staff (36%).
Sailing into the tech future…
Thar be the new tech on the horizon!When it comes to technology trends, more than 40% of respondents state they’re currently using IT automation. Close to 40% are using advanced security solutions, and 30% are already on board with software-defined storage/virtual SAN.
Currently, 29% of organizations have adopted IoT, 18% have adopted VR, and 13% have adopted AI. And adoption is expected to grow significantly in the next 12 months. An additional 19% of organizations plan to adopt IoT next year while another 14% and 17% plan to adopt VR and AI, respectively.
Adoption of emerging tech trends is even higher in larger organizations. In fact, about 30% of organizations with 1,000+ employees say they’ve adopted AI, and an additional 25% plan to adopt it next year. Perhaps the rise in IT budgets is leading more companies to jump on the latest trends.
The Voyage Ahead
From budgetary bounty in 2018 to expected increase in revenue, purchase paradise might be the reality in the coming year. Tech marketers (marketers?) would be wise to invest their campaign shillings in cloud services.
While IT buyers might be below the deck when it comes to GDPR compliance, educational content on the repercussions of the regulation could help build trust and lasting relationships… and help convince companies they need to pay attention before the ship has sailed. And while they have long seemed far out on the horizon, more and more companies are adopting new technologies like IT automation, AI, software-defined storage, and more.
It would be wise for marketers to keep an eye trained on the emerging technologies that could become the next hot, new trend. 2018 holds great promise for IT departments and marketing professionals alike, and exciting changes are afoot. After years of stagnation, increasing IT budgets and company revenues (along with a rising economic tide) just might help propel IT pro-pirates and marketer mariners along their next great voyage.