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Where are IT expenditures heading?

Posted by Aoife McMonagle on Jan 15, 2015 3:07:19 PM

In the past few years, a wider variety of businesses hailing from a range of industries have started to put a bit more stock into information and communications technologies, with IT budgets taking up a larger portion of overall spend than ever before. As a result of constantly evolving technological assets and strategies that are meant to guide their use, major trends in cloud computing, big data, mobility and more have begun to surface already in 2015. 

One would be hard-pressed to find a business today that does not have a major stake in at least one form of digital technology, as more and more commerce is taking place in online environments and operations are increasingly dependent upon a wider range of solutions. While more spending on technology is a fact and one that makes plenty of sense, decision-makers should be vigilant in their spend management and provisioning procedures so as to not create any form of waste. 

When 2014 came to a close, continued growth in cloud services, big data and mobility were recorded, while emerging trends such as the Internet of Things began to gain a bit more traction right toward the end. In 2015, one can only assume that similar investment decisions and purchasing behaviors will continue to move on a steady track, with those major technologies taking up a greater portion of capital and operational expenditures this year than they did in 2014. 

Where the money goes
Gartner recently released its latest report on IT spending that itemized some of the most popular areas of investment for businesses heading into the next 12 months, asserting that overall expenditures on technology are set to expand by a rate of 2.4 per cent this year. According to the analysts, device spending increased 3.8 per cent in 2014, and is forecast to grow by another 5.1 per cent this year, likely due to the IoT trend along with continued commitments to mobility. 

When looking at last year's figures and the projections for 2015, enterprise software is the clear and somewhat obvious king, as it is riding 5.8 per cent in revenues in 2014 and is poised to expand by another 5.5 per cent in the next 12 months. Telecom services and data centre systems had the weakest growth margins, although it is worth noting that expenditures on these items in the preceding years might account for the plateau that has been reached. 

The researchers made it a point to note that while these projections might seem somewhat extreme at first glance, there are other factors involved that should be considered. 

"The change in forecast is less dramatic than it might at first seem. The rising U.S. dollar is chiefly responsible for the change - in constant currency terms the downward revision is only 0.1 per cent," John-David Lovelock, Gartner's research vice president, asserted. "Stripping out the impact of exchange rate movements, the corresponding constant-currency growth figure is 3.7 per cent, which compares with 3.8 per cent in the previous quarter's forecast."

Proper planning is critical
Global economic improvements have provided businesses with a bit more room in their budgets to invest heavily in technology and, while solutions are becoming more intuitive and accessible, decision-makers need to ensure that they are taking highly structured approaches to provisioning. 

Selecting the right service providers and product vendors is critical to getting the most out exciting and new technologies, while having an objective-driven strategy in place to manage these tools and solutions throughout their life cycles can further boost returns on investment over time. 

Topics: Data Management