IT Spending is Healthy, But Where's the Money Going?

Some IT spending data has recently been released, and it shows a healthy stabilization — if not growth — of IT spending. Plus, analysts expect IT spending to keep surging through 2015.

A new survey of 1,100 IT managers and professionals from Spiceworks shows that on average, most organizations on average will spend $253,000 on IT products and services this year. In addition, 42 percent of IT professionals expect an increase in IT budgets in 2015.

In the latest CIO Tech Poll of 178 IT leaders, about half — 47 percent — say they expect their IT budgets to grow. At the same time, only 12 percent report budget decreases — the lowest number reported since CIO started the poll in 2008.

While the surveys don't drill down into insurance and financial services results, it can be assumed that a sizable portion of respondents come from these sectors, and that the same trends shaping IT departments are being seen within insurance IT departments as well.

Okay, so IT budgets are probably the healthiest they have been since 2007, before the global doom descended on everyone. But where is the money going these days? Here are some observations:

Little or no increased funding for IT staffing: As Spiceworks notes in its survey: “Despite higher budgets and a growing number of technologies entering the workplace, 60 percent of IT professionals said they don’t expect their organization to hire additional IT staff next year.”

Application development and management: The CIO survey finds that applications are the highest-growth category for IT budgets in the year ahead, with 54 percent planning IT budget increases in that category, up from 48 percent in the previous year.

Cloud: Sixty-one percent have adopted cloud, and eight percent will be moving into cloud over the next six months. Leading solutions are web hosting, email hosting, productivity solutions and content filtering. Online backup and recovery is the leading application area planned for the next six months. In the CIO survey, 40 percent indicate they will be boosting spending on the combination of cloud and outsourcing services.

Virtualization: Spiceworks finds that 74 percent of IT professionals said they have already adopted virtualization solutions with an additional nine percent planning to in the next six months. IT services and platforms are the main types of workload virtualization is supporting.

Mobile devices: Three out of four enterprises in the Spiceworks survey are supporting smartphone deployments, and another seven percent will be adding these to their budgets in the year ahead. The CIO survey puts the number at 47 percent who are planning budget increases in this area.

Hardware: Thirty-seven percent of IT leaders plan to boost hardware spending, the CIO survey finds. This is the same as last year.

Network infrastructure: Just over one-third, 36 percent, of IT shops will be boosting spending in this area, CIO finds.

Joe McKendrick is an author, consultant, blogger and frequent INN contributor specializing in information technology.

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