2019 is just weeks away, and organizational leaders have turned their attention to a critical component of planning for the new year: budgeting. Next year’s IT budgets are likely to grow, according to the “2019 State of IT” report just released by Spiceworks. After interviewing more than 700 IT professionals, several trends emerged — and many of them suggest a move on the part of IT leaders to make core investments in their underlying infrastructures.
There’s a sense that technology buyers are discriminating when it comes to splashy, cutting-edge technologies that make headlines but may not deliver the business value in the immediate term. Instead, this year’s plans involve major focus and investment into the underlying infrastructure elements — hardware, software and managed services — that are needed to increase performance across the business. If you’re thinking about your own IT budget and looking to see how your plans stack up against best industry trends, here are some key takeaways and considerations for mid-size businesses.
Mid-size IT Budgets Are Going to Stay Steady or Increase
Overall, IT managers expect that their budgets will stay level or increase in the year ahead. Part of that optimism is due to expectations for an ongoing healthy business climate throughout 2019. Spiceworks reports that 55% of businesses with 100–499 employees expect revenues to increase in 2019. Many organizations are also looking to reinvest the funds they’re holding onto as the result of last year’s tax cuts.
As a result, companies are able to make more investments in technology, and that’s showing up in 2019 budget expectations and forecasting; 28% of organizations with 100–499 employees expect their IT budgets to grow, while 55% expect their budgets to remain level. That’s good news for IT departments that have spent years trying to do more with less.
Many business executives and IT leaders now have the opportunity to retroactively invest in updating technologies that are at the end of their lives, replace outdated hardware and make sure their organizations are being supported by best-in-class software products and managed solutions for priority areas. From cybersecurity to productivity, IT departments have more aggressive mandates than ever before — and these larger budgets will support their ability to successfully deliver across these many dimensions.
Digital Marketing, Sales and Other Technologies Continue to Grow — Implications for IT
Digital-facing technologies and the supporting infrastructure needed to deliver winning customer experiences will be a top focus in the year ahead. TechRepublic reports that Gartner’s CIO Agenda Study offers some insights into the direction organizations will take. Digital transformation and scaling brands’ digital presences will continue to be an area of growth, with a focus on building marketing and sales capabilities. There was a 17% increase in the number of organizations that were scaling up digital activities to 33% with a focus on omni-channel customer engagement. The rise of certain marketing-related regulations, such as GDPR, has also required organizations to make strategic investments in those areas. These needs are particularly pronounced in companies that deal with customers in Europe, but signal a global trend as companies anticipate more rigorous privacy and data management policies in the years ahead.
For IT leaders, these moves have implications beyond individual systems and marketing platforms. Investing in customer-facing digital experiences will require foundational IT investments, as well as budgets for purchasing platforms, tools and the staffing needed to support ongoing digital growth. Stronger cybersecurity precautions, faster networking solutions and end-point management also come into play. As terms like “the customer experience” drive delivery in all aspects of organizations, IT will be under pressure to make upgrades that ensure they’re working with an infrastructure that can deliver on those expectations.
Increasing Outdated Infrastructure Is a Significant Priority for IT Leaders
Organizations are dealing with a number of different factors shaping their IT investments. Across the board, budgets will reflect that replacing outdated infrastructure is a significant priority for organizations. In the Spiceworks survey, 59% of mid-size organizations noted that a significant factor in upgrades was technology resources at an end-of-life stage.
There are a variety of infrastructure-level areas that are top considerations for IT leaders:
Hardware: Spiceworks reports that mid-size organizations will be focusing on replacing outdated endpoints such as computers, laptops and mobile devices. Many will also be upgrading servers and security devices. For organizations with 100–499 employees, 10% of hardware budgets will be spent on networking and telephony.
Software: Mid-size businesses are investing in new software tools. Across organizations, operating systems, productivity applications, industry-specific solutions, virtualization, security tools, database management and business support, applications are getting the lion’s share of budget allocations.
Hosted Services: The influence of the cloud and managed solutions continues to grow, comprising 27% of all mid-size business budgets. Smaller mid-size organizations are focusing on online backup and disaster recovery, productivity, and email and web hosting. Larger mid-size firms are focused on the same, along with industry-specific tools and IaaS (Infrastructure-as-a-Service) solutions.
Managed Solutions: Spiceworks notes that managed services are on the rise, with firms with 100–499 employees budgeting 12% on these items. The most in-demand managed solutions for smaller mid-size companies include managed backups and disaster recovery, managed hosting, managed cloud infrastructure and managed networking.
Cybersecurity Will Drive 2019 IT Investments
With headlines ablaze with information on new cybersecurity threats and data breaches, many companies are taking steps to make sure they head into 2019 better protected against these destructive forces. According to Spiceworks, 46% of companies with 100–499 employees cite increased security concerns as a driver of higher budgets and increased IT investments.
The solutions organizations are pursuing range from better hardware and software tools, to managed cybersecurity solutions. Other investments are likely to include partnerships to identify vulnerabilities, employee-awareness training, and on-demand consultants who can help field security incidents when they do occur.
Wi-Fi Networking Gets an Upgrade
While some types of emerging technologies are receiving less attention, many companies are looking toward future networking trends. Companies are increasingly focused on speeding up network access, especially for connected devices that rely on Wi-Fi. Currently, 36% of companies with 100–499 employees use Gigabit Wi-Fi networking, and 22% plan to make the leap in the next two years. Slightly larger mid-size firms are even more excited about the possibilities of ultra-fast Wi-Fi, with 31% already using the technology and 39% planning to adopt Gigabit Wi-Fi networking in the next 24 months. With faster Wi-Fi, brands will be prepared to support employee productivity, customer experiences and a range of connected devices.
The way your organization spends its IT dollars in the year ahead can have a significant impact on reaching your company’s goals. The latest studies show that while mid-size organizations are ramping up IT budgets or continuing to spend at stable levels, priorities are changing. There is less focus on exotic solutions or emerging trends, and a stronger focus on ensuring that top-tier performance is possible with access to a stable infrastructure and the best tools organizations need to achieve their objectives.