Security, SaaS, cloud lead IT investment

Dive Brief:

While IT spending is down from a record high index of 86.5 last June, it remains at the third-highest level since 2002 at 76, according to a Goldman Sachs survey of chief investment officers at technology companies, reports The Street. The biggest spending priorities are security, Software as a Service, analytics and cloud infrastructure, according to the report.
In the next three years, workloads on the cloud are expected to grow from 18% to 34%, according to Goldman Sachs, reports Investor's Business Daily. The realities of migrating workloads to the cloud and adjusting applications to a new platform mean that some businesses are going to be hybrid for longer than expected, a spending boon for on-premise vendors.
After 10 years of top rankings, Microsoft was again identified as the most strategic vendor for chief investment officers, with the expectation for this to continue for the next three years, reports IBD. Second place was a tie between Amazon and Cisco, and Salesforce and IBM tied for fourth. It is Salesforce's first time in the top five as Oracle fell to No. 8.

Dive Insight:

The chief investment officer and chief information officer must work hand-in-hand. Technology strategy can be meaningless unless the purse strings are open.

As IT spending grows, it reinforces the dominance of a few large cloud-based vendors. Microsoft, for example, is the No. 2 Infrastructure as a Service provider and the No. 1 SaaS provider. Google is No. 3 in cloud and an industrywide leader in security and analytics. And Salesforce maintains a tight grip on the CRM market.

Getting more from a single vendor helps with compatibility across internal systems, products and applications. Few customers would rather balance 20 vendors than 10 if the products and services are the same.

As more business shifts to cloud vendors, on-premise vendors have a few more years to adjust business models to the age of the cloud. Failure to make the transition will leave companies focused on legacy hardware and tech in the dust. The transition may be choppy, but the alternative could be a death knell.