Budget Planning

IT Budgets for 2019

With just a few months left of 2018, many companies and organizations are amid planning their IT budgets for 2019. What areas will be a focus for next year?  Hardware? Cloud? Storage? IoT?

 

A few surveys recently went out asking IT professionals about predictions on their IT spending for 2019. Good news is that most companies expect their budget to grow or stay steady in 2019.

 

The main reasons for ramping up IT budgets for next year include upgrading outdated IT infrastructure, cyber security and supporting digital transformation initiatives. 82% of government organizations across North America and Europe said they were expanding IT budgets due to outdated IT infrastructure, which is significantly higher than in any other industry.

 

Survey Results: State of IT Budgets 2019

 

Spiceworks recently released their State of IT Budgets 2019.

 

Their key findings were:

 

1) Most companies expect their IT Budgets to grow or stay steady in 2019.
2) The need to upgrade outdated IT infrastructure is the biggest driver or IT budget increases in 2019.
3) More than 1/3 of midsize companies (500 – 999 employees) saw IT budget increases due to corporate tax cuts
4) Small businesses are making significant increases to their hardware budgets while large enterprises are increasing their cloud budgets in 2019.
5) Organizations that expect IT budget increase next year, anticipate a 20% increase on average. Only 6% expect a decrease in budget.

 

When looking at how budgets will be allocated for 2019:

 

  • Software and cloud budgets remain steady from the previous year
  • Hardware budget allocations get smaller as company sizes increase and managed service budget allocations get larger.
  • Smaller organizations are investing a larger percentage of their hardware budget in desktops and laptops.
  • Midsize organizations with 500 to 999 employees are investing a bigger portion of their budget in tablets and mobile devices.
  • Larger enterprises expect to spend a larger chunk of their hardware budget on security gear.
  • For large businesses, the movement to cloud-based infrastructure will help drop expenditures in total cost of operations.

 

In terms of software budget allocation:

 

  • Operating Systems: 12%
  • Virtualization: 10%
  • Productivity: 10%
  • Security Software: 10%
  • Larger organizations are allocating the biggest chunk of their software budget to productivity solutions.
  • Midsize organizations are prioritizing virtualization software.
  • Smaller organizations are allocating the most to operating systems.

 

 

Reasons Why Organizations are Looking at New Tech for 2019:

 

  • Smallest companies are more driven to purchase new tech due to end of life (62%), business growth (57%), and end user needs (55%).  {Example: Windows 7 and Windows Server 2008}
  • Companies with 5,000+ employees said new technology features are the primary driver enticing them to purchase new tech.

 

For the most part, IT heads of organizations are the sole decision maker when make decisions on hardware, software and service product purchases. A few organizations may require a CEO to sign on the bottom line for contracts but the IT professional usually does the majority of the research, vendor selection and negotiation.

 

 

Other Predictions

 

Tech Pro Research surveyed technology professionals in August and found that executives are viewing IT budgets pretty favorably. A growth of 1-10 percent increase over 2018 IT budgets is predicted. The growth can be attributed to a favorable business climate, as well as a better understanding that technology can help fuel revenue opportunities and save money for businesses.

 

Gartner recently stated that future growth could be hindered by the strengthening U.S. dollar, political uncertainty, NAFTA renegotiations and possible future trade wars.

 

With the increase in IT budget, standards for vendors providing products will change. Businesses will expect vendors to conduct successful proofs of concept before they purchase any new products. It will be key for the sales person selling the products to be knowledgeable and listen to the needs and wants of the business.

 

ZDNet shared this video on trends and projections for IT budgets in 2019:

 

 

Organizations are looking for what will increase their efficiencies, save costs in the long run, improve employee satisfaction on the job and enable a secure environment for their business operations.  IT professionals are active researchers and often consume at least 16 pieces of content before making a decision about purchasing a product. It is important for vendors approaching IT professionals to focus more on the resources they need to make a decision and skip the sales pitch.

 

How is your organization allocating funds for IT for next year? Contact Zunesis to find out how we can help you navigate through the various options out there. We will help you find the right product that fits within your budget and environment.

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