Knowing how and where to spend your IT budget is crucial. Businesses are investing money in cybersecurity, digital transformation, and other critical projects. A report released yesterday by Spiceworks Ziff Davis examines how and where businesses plan to spend their IT budgets in 2021.
For its report, Spiceworks Ziff Davis surveyed 1,073 business technology buyers across North America and Europe in June and July 2020.One challenging situation facing businesses is undoubtedly the COVID-19 that is affecting countries around the world. As a result, businesses are being asked to find the necessary funds and manage their IT budgets in a way that supports and secures their remote workforce. But how will they achieve this at a time when their revenues are being minimized in the face of the pandemic and the subsequent lockdown?
According to research conducted by Spiceworks Ziff Davis, IT budget growth has slowed compared to last year. Among respondents, 33% said they plan to increase their IT budgets for 2021, down from 44% who said the same for 2020. In addition, about 17% of businesses expect their budget to decrease in 2021. At the same time, about 80% of businesses expect their budget to remain the same or increase next year.
The global pandemic and its consequences will largely determine the decisions businesses make regarding their IT budget. Over 50% of businesses said they aim to maintain their flexible policies , while 44% are looking to increase their digital transformation plans.
Other goals that businesses are highlighting for 2021 include: 1) improving security and governance, 2) enhancing training to support employees working remotely, 3) connecting employees using secure and standardized tools, and 4) improving disaster recovery plans to cover more scenarios.
Replacing outdated IT infrastructure and addressing security issues will be among the top factors driving IT budget increases. Other factors driving larger budgets include: 1) increased priority for IT projects, cited by 45% of respondents, 2) changes in business operations during COVID-19, cited by 38% of respondents, and 3) the need to support a remote workforce, cited by 36% of respondents.
Due to the decline in revenue brought about by the health crisis, spending in some areas will take a back seat in 2021. For example, many businesses are not planning to hire new workers amid the pandemic. In addition, spending on emerging technologies is expected to decrease dramatically, especially in small and medium-sized businesses, which will focus more on primary and critical needs and less on cutting-edge technologies. Hardware will continue to take the largest share of IT budgets next year, but spending in this category will continue to decline, while more and more businesses are investing in the cloud and managed services.
Finally, Peter Tsai, senior technology analyst at Spiceworks Ziff Davis, said that as more employees work remotely during this period, businesses would not be able to maintain their productivity and efficiency levels high without the help of technologies such as laptops , VPNs , and chat and video meeting applications
