Dive Brief:
- Over half of companies expect to grow IT budgets in the next 12 months, according to Spiceworks Ziff Davis' 2022 State of IT report. The firm surveyed 1,145 IT buyers from companies in North America and Europe.
- The increased priority of IT projects drove IT budget growth, half of IT buyers said. Just 47% of decision makers cited outdated infrastructure upgrades as a key driver of IT spend, compared to 64% in the 2020 edition of the report. One in five respondents cited inflation as a contributing factor of IT budget increases.
- Though it's the largest share of IT budgets, hardware spending has continued a slow but steady multiyear decline, making up just 30% of IT budget, down from 33% two years prior. By contrast, spending on hosted or cloud services rose from 22% in 2020 to 26% in 2022.
Dive Insight:
The theme of recovery looms large over projected 2022 spending trends. Businesses anticipate a revenue upswing as the pandemic gives signs of easing. Bolstered by more cash flow, IT projects that support operations will rise in priority for decision makers.
"An increase in priority on IT projects will be the main reason why companies are increasing their IT budgets," said Peter Tsai, head of technology insights at Spiceworks Ziff Davis. "In previous years, it was a need to update outdated IT infrastructure, but that's not necessarily the case this year.
Enterprises with critical modernization tasks in their to-do list already shifted their attention to those projects last year, according to Jim Rapoza, VP and principal analyst at Aberdeen, a Spiceworks Ziff Davis-owned company.
Companies "had to shift on a dime and accelerate any modernization projects they had in place," in the aftermath of the pandemic, according to Rapoza. Now, with critical modernization attended to, the priority in spending lies in maintaining the IT infrastructure that proves vital to functioning enterprise.
Enterprise focus on IT spend shows how critical systems have become, and how much IT is grappling to meet internal and external pressure, as companies operate in a hybrid model. For one-third of IT professionals, budgets or resources are insufficient to meet their company's technology demands, according to a report from Kaseya.
