Tech Spending Leveling Off After Four Years of Tremendous Growth
CIO Tech Poll: IT Economic Outlook research explores budget allocation and economic factors influencing tech spending
Framingham, Mass. – May 5, 2016 –CIO from IDG—the executive-level tech media brand providing insight into business technology leadership—reveals that tech spending is leveling off after four years of significant growth in the CIO Tech Poll: IT Economic Outlook 2016 research (click to tweet). While overall tech budgets are expected to increase by 3.7%, only 38% of organizations are anticipating increasing their tech budget in the next year, compared to 50% last year. With this swing, 43% of organizations are anticipating budgets will remain flat, while only 17% are anticipating a decrease.
Results from more than 200 tech leaders confirm that their IT teams remain the lead for driving tech investments. The poll explored five growing tech categories—big data & analytics, cloud, connected devices/IoT, mobile and social—and IT owns investment responsibility, by a large margin, for all categories, except social, which is being driven by the marketing function. Because of the central role technology plays within organizations, CIOs share quantified time-certain goals, such as ROI and TCO, related to technology deployments with their executive peers, most notably the CFO.
“There are many global tech trends that are contributing to the slowdown in tech spending. IDC specifically notes economic weakness in emerging markets and the saturation of smartphones resulting in slower tech spending growth,” said Adam Dennison, SVP/publisher, CIO. “Fortunately, US organizations have had healthy growth over the past few years, allowing for budget reallocation to support top priorities, including security and innovation.”
Publicized Breaches Continue to Drive Security Investments
Security continues to be a top concern for organizations and they are increasing the percent of the IT budget dedicated to security solutions to help thwart breaches. Additionally, organizations are increasing budget allocations for security risk analysis. Thirty percent of enterprises and 26% of SMBs (<1,000 employees) are also limiting purchases to known/trusted vendors. Between enterprises and SMBs, one material difference in the approach to security is that enterprises are 18% more likely to invest in hiring new employees with security skill sets.
Budget Influences – Open Source & Bimodal IT
Open source continues to be a game changer for organizations as it allows for agility and can reduce spending. More than half of enterprise organizations (52%) are currently using open source technology and an additional 25% are evaluating or planning to use open source. The majority of organizations using open source are seeing cost savings (86%). These savings are translating into tech talent investment for 31% of enterprises.
To keep a focus on stability and accuracy within the tech environment, while at the same time creating an environment that fosters agile business innovation, 64% of organizations are taking a bimodal approach to tech. The poll reveals that budgets will shift from traditional tech spending to investments that are exploratory and focus on innovation. Sixty-five percent expect budget increases for innovation initiatives.
Economic Factors Influencing Tech Spending
Despite all of the US presidential election media coverage, this societal factor has the least impact on tech investments in the coming year. As noted above, public security breaches are having the largest positive impact on tech spending, and economic unrest outside of the US is having the largest negative impact on tech spending.
To view additional information on the research please visit: http://bit.ly/1SNZHRQ.
About CIO Tech Poll: IT Economic Outlook Research
The CIO Tech Poll: IT Economic Outlook Research is conducted once a year, among heads of IT, to gauge how current economic conditions are impacting IT spending. The current CIO Tech Poll: IT Economic Outlook was conducted between February 24, 2016 and April 9, 2016 through the CIO Forum on LinkedIn and the CIO customer database. Results are based on 217 respondents who indicated they are the top IT executive at their company or business unit.
CIO from IDG is the premier content and community resource for information technology executives and leaders thriving and prospering in this fast-paced era of IT transformation in the enterprise. The award-winning CIO portfolio—CIO.com, CIO executive programs, CIO Strategic Marketing Services, CIO Forum on LinkedIn, CIO Executive Council and CIO primary research—provides business technology leaders with analysis and insight on information technology trends and a keen understanding of IT’s role in achieving business goals. Additionally, CIO provides opportunities for IT solution providers to reach this executive IT audience. The CIO Executive Council is a professional organization of CIOs created to serve as an unbiased and trusted peer advisory group. CIO is published by IDG Enterprise, a subsidiary of International Data Group (IDG), the world’s leading media, event and marketing services company. Company information is available at http://www.idgenterprise.com/.
IDG connects the world of tech buyers with insights, intent and engagement. IDG is the world’s leading media, data and marketing services company that activates and engages the most influential technology buyers. Our premium brands, including CIO®, Computerworld®, PCWorld® and Macworld®, engage the most powerful audience of technology buyers providing essential guidance on the evolving technology landscape. Our global data intelligence platform activates purchasing intent, powering our clients’ success. IDG Marketing Services creates custom content with marketing impact across video, mobile, social and digital. We execute complex campaigns that fulfill marketers’ global ambitions seamlessly with consistency that delivers results and wins awards. IDG is the #1 tech media company in the world, per comScore.*
*Source: comScore Media Metrix, Desktop Unique Visitors, Worldwide, February 2016