SOURCE: Spiceworks

Spiceworks

September 28, 2016 08:00 ET

Survey: Political, Economic Uncertainty to Drive Cautious IT Spending in 2017

IT Professionals Expect Flat IT Budgets in 2017; Say Technology End-Of-Life is the Number One Driver of IT Investments

AUSTIN, TX--(Marketwired - Sep 28, 2016) - Spiceworks, the professional network for IT, today announced the results of its 2017 State of IT report, a study examining the technology budget and adoption trends of IT professionals in North America and Europe, the Middle East and Africa (EMEA). According to the results, IT budgets in 2017 are expected to remain relatively flat across North America and EMEA, but in the United Kingdom specifically, budgets are expected to decrease by five percent as IT professionals grapple with the political and economic uncertainty driven by "Brexit." Additionally, 64 percent of respondents anticipate IT headcount remaining flat in 2017 despite an expectation that company revenues will increase.

The results show nearly 30 percent of IT professionals say global political and economic uncertainty directly affects their organization's willingness to purchase IT products and services. Forty-seven percent also agree that economic and political uncertainty causes their organization to reconsider what countries they store corporate data in, and 37 percent say it causes their organization to reconsider what countries they purchase technology products and services from.

"A confluence of global events, such as political instability, slow economic growth, and unexpected affairs like the UK's pending exit from the European Union, have left IT professionals with more questions than answers as they relate to both short-term and long-term effects on their organization," said Sanjay Castelino, vice president of Marketing at Spiceworks. "IT departments expect to take a more cautious, conservative approach to their investments in 2017 as they manage new regulations, fluctuating exchange rates, and other seen and unforeseen challenges."

Cloud and Hosted Services Become Bigger Priorities; Small Budget Declines Expected Across Hardware, Software and Managed Services
As in previous years, IT professionals plan to spend a majority of their 2017 IT budgets on hardware and software, yet the budget allocated for these projects is expected to slightly decrease by two percentage points year over year to 35 and 29 percent respectively. IT budget allocations for managed service projects will also slightly decrease by one percentage point to 12 percent. However, 17 percent of IT budgets will be spent on hosted/cloud-based service projects in 2017, a three point increase in budget year over year. Thirty-eight percent of IT professionals also said cloud and hosted services are very or extremely important to their current business practices compared to 29 percent last year.

Budget highlights within each category include:

  • In hardware, budget allocations for desktops and laptops are nearing a tie at 18 and 16 percent respectively as desktop spending decreases by three percentage points and laptop spending remains flat. Seventeen percent of hardware budgets will be spent on servers.
  • Fifteen percent of software budgets will be spent on virtualization, 13 percent will be spent on productivity software, and 13 percent will be spent on operating systems, such as Windows 10 upgrades.
  • Nineteen percent of hosted/cloud-based services budgets in 2017 will be spent on email hosting and 14 percent will be spent on online backup and recovery. Web hosting fell to third on the list after slightly decreasing three percentage points to 11 percent. 
  • In managed services, 17 percent of budgets will be spent on IT service providers, 15 percent on consulting, and 14 percent on storage, backup, and archiving services.

Technology End-of-Life is Number One Driver of IT Investments
When IT professionals were asked what's driving investments in new hardware, software, and services in 2017, 70 percent cited technology end-of-life (EOL) as the number one purchase driver, followed by additional needs due to company growth at 63 percent, and technology upgrade and refresh cycles at 59 percent. However, technology upgrades can be delayed due to budget and time constraints.

Looking ahead to 2017, both Microsoft Office 2007 and Windows Vista will reach their end of support dates next year. However, Spiceworks' network data shows Office 2007 is still installed in 51 percent of businesses across the globe in Spiceworks. While Windows Vista is only running in 10 percent of businesses in Spiceworks, Windows XP is still running in 56 percent, despite reaching its EOL in 2014. Spiceworks data also shows Windows Server 2003 is running in 52 percent of businesses despite its EOL in 2015.

IT Professionals Select Google, Amazon, and Microsoft as "Top Brands to Watch" in 2017
For the first time in the State of IT, IT professionals were asked in a Spiceworks social poll about what brands they're most excited about in terms of bringing innovative technology to the workplace in 2017. Google topped the list with 49 percent of IT professionals saying it's an innovative tech company to watch next year. Amazon ranked second at 34 percent and Microsoft came in third at 21 percent. The top 10 list of the most innovative companies to watch in 2017 also included Apple, Nvidia, Samsung, VMware, Intel, Cisco, and Ubiquiti.

Methodology
Spiceworks conducted a survey in July 2016, including 886 respondents from North America and EMEA. Respondents are among the millions of IT professionals in Spiceworks and represent a variety of company sizes including small-to-medium-sized businesses as well as enterprises. Respondents come from a variety of industries including manufacturing, healthcare, non-profits, education, government, and finance. The survey data was supplemented with Spiceworks network data collected in September 2016, based on anonymized, aggregated deployment data from IT professionals across the globe that use Spiceworks to inventory their organization's laptops, desktops, software, operating systems, and more. For more information and a complete list of survey results, visit www.spiceworks.com/marketing/state-of-it/report/.

About Spiceworks Voice of IT
Spiceworks' Voice of IT shares statistics, trends, and opinions collected from millions of IT professionals on the global technology issues that are important to them. For other Spiceworks Voice of IT reports and snapshots visit: www.spiceworks.com/research.

About Spiceworks
Spiceworks is the professional network millions of IT professionals use to connect with one another and thousands of technology brands. The company simplifies how IT professionals discover, buy and manage more than $600 billion in technology products and services each year. Headquartered in Austin, Texas, Spiceworks is backed by Adams Street Partners, Austin Ventures, Institutional Venture Partners (IVP), Goldman Sachs, Shasta Ventures and Tenaya Capital. For more information visit http://www.spiceworks.com.

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Spiceworks and Voice of IT are registered trademarks of Spiceworks, Inc. All other names may be trademarks or registered trademarks of their respective owners.

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