IT Budgets Set to Stabilize in 2018, Predicts Research

44% IT managers anticipate 2018 budget increase

Spiceworks has unveiled results from its 2018 “State of IT” report, which studied IT adoption trends and technology budgets for companies in North America and throughout Europe. The analysis reveals that IT budgets should stabilize and grow in 2018, as companies plan hire more staff and continue to invest in IT transformation projects.

Funding for emerging technologies like IoT, artificial intelligence and virtual reality are expected to rise as well. In turn, companies will likely spend more on  applications and services. As expected, investment in cloud services will also grow; in fact, the report estimates that cloud spending will come closer than ever to matching money spent on software. Among reasons cited for this trend was an increasing need for data access across the world, which cloud paradigms simplify.

Increased Budgets and New Hires

Few companies expect their IT budgets to drop in 2018. Among those interviewed, 43 percent expect their budgets to remain roughly the same as in 2017, while 44 percent anticipated their budgets will rise. Among the rest, only 11 percent expect their budgets to drop. Among the 44 percent expecting an increased IT budget, respondents estimated an average 19 percent increase in spending.

These stabilizing budgets are having an effect on hiring practices as well. A total of 45 percent of respondents expected to hire new staff to manage new software, hardware, and services. These numbers varied by company size, with larger companies expecting more IT spending increases. Among companies with 1,000 to 4,999 employees, 62 percent believe they’ll hire more IT employees. Among those with 5,000 or more employees, 70 percent expect an IT hiring increase.

Emerging Technology

Currently, 29 percent of companies have adopted IoT hardware and practices. Over the next year, this number is expected to jump to 48 percent. Likewise, 18 percent of respondents report using virtual reality, a number projected to rise to 32 percent. Only 13 percent of companies have invested in artificial intelligence; over the next 12 months, this will grow to 30 percent.

Again, this trend in more pronounced at larger companies. Thirty percent of companies with more than 1,000 employees have currently invested in both virtual reality and artificial intelligence, and an additional 25 percent expect to do so in the coming year.

The study also revealed that 43 percent of companies have already adopted IT automation, while an additional 22 percent will do so next year. Recent hacks have played a role as well; 38 percent of companies are now investing in advanced security, with 28 percent more planning on doing so in the next 12 months.

The Cloud Continues to Rise

The study showed that spending on hardware and software will remain higher than spending on cloud services in 2018, but the gap will continue to drop. Respondents reported that 31 percent of their IT spending will be on hardware, followed by 26 percent spent on software. Twenty-one percent of budget allocation will be spent on cloud-based or hosted services, with an additional 15 percent going to managed IT services.

Among this spending, the cloud represented the largest growth, with 55 percent of businesses reporting a cloud budget increase. Again, large companies dominate these increases; 66 percent of companies with 1,000 to 4,999 employees will increase their cloud spending, while 72 percent of companies with more than 5,000 employees will do so. Forty-two percent of companies are moving to cloud-based operations for easier data access, and 38 percent cited disaster recovery. Better scalability and flexibility was indicated by 37 percent of respondents.