Aging IT infrastructure drives IT budget increases in 2019

The results show 34 percent of European organisations expect their IT budgets to increase in 2019, while 56 percent expect them to remain flat year over year. Organisations that expect IT budget increases next year anticipate a 21 percent increase on average. Only 6 percent of European companies expect a decrease in IT budgets in 2019, compared to 9 percent in 2018.

Among European businesses boosting their IT budgets in 2019, growing security concerns were the second biggest driver of budget increases behind the need to upgrade outdated infrastructure. Sixty percent of European businesses reported growing security concerns as a top driver of budget increases, followed by an increased priority on IT projects at 57 percent. Compared to their counterparts in North America, European businesses were more likely to increase IT budgets due to changes in regulations, such as GDPR (45 percent in Europe vs. 30 percent in North America), and due to currency fluctuations (14 percent in Europe vs. 5 percent in North America).

IT budget allocations: European organisations boost hardware and cloud budgets while reducing software spend

European organisations plan to spend 36 percent of their budgets on hardware purchases, up by 5 percentage points year over year. Software budget allocations decreased by 2 percentage points to 24 percent in 2019, while cloud service budgets increased by 1 percentage point to 20 percent. Budgets for managed IT services remained steady year over year at 16 percent.

Compared to their North American counterparts, European businesses are allocating more of their budgets toward hardware and managed IT services, and slightly less on software.

European budget highlights within each category include:

• In hardware, budget allocations for desktops (18 percent), laptops (18 percent), servers (10 percent), and power and climate (10 percent) hardware top the list.

• Top software budget allocations include operating systems (12 percent), followed by productivity (10 percent), security (10 percent), and virtualisation software (9 percent).

• Online backup and recovery leads spending in hosted/cloud-based services: 15 percent of cloud budgets are allocated towards online backup/recovery, followed by email hosting (12 percent), web hosting (9 percent), and online productivity solutions (8 percent).

• In managed services, 10 percent of budgets will be spent on both managed hosting and managed storage/backup, followed by managed business applications (9 percent) and managed security (8 percent).

Technology purchase decisions: ITDMs make the decision, BDMs sign the checks

Spiceworks also examined the roles various individuals play in the technology purchase process. Business line directors are involved in the technology purchase decisions in 37 percent of European companies, the owner/CEO is involved in 35 percent of organisations, and finance managers are involved in 30 percent. ?

However, IT decision makers (ITDMs) are more likely to be the sole decision maker across all technology categories when compared to business decision makers (BDMs). ITDMs are most likely to be the sole decision maker for networking solutions, backup/recovery, computing devices and physical server purchase decisions. When involved, BDMs are more likely to either sign off on final approval or veto the deal after ITDMs have made their vendor and product selection.

“When it’s time to upgrade or purchase new tech, organisations entrust IT professionals to find the best solution to meet the needs of the business,” said Peter Tsai, senior technology analyst at Spiceworks. “For major tech purchases, the CEO or finance manager may be involved to sign on the dotted line, but in most cases, it’s the IT decision maker who conducts the in-depth research, evaluates the vendors, and ultimately chooses the best solution for the business.”