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Aging IT Infrastructure Drives IT Budget Increases in 2019

Nine out of ten (89 percent) companies expect their IT budgets to grow or remain flat in 2019. Although factors driving budget increases vary significantly by company size, 64 percent of those planning to increase budgets are doing so to upgrade outdated IT infrastructure, according to the 2019 State of IT Budgets report from Spiceworks.

Across all company sizes, 38 percent of organizations expect IT budgets to increase in 2019, and 51 percent expect them to remain flat year over year. Organizations that expect budget increases next year anticipate a 20 percent increase on average, up from 19 percent in 2018. Only 6 percent of companies expect their IT budget to decrease in 2019, compared to 11 percent in 2018. Larger organizations are most likely to see their budgets grow: 56 percent of companies with more than 5,000 employees expect IT budgets to grow, and 43 percent expect them to stay the same in 2019.

When comparing the factors driving budget increases by company size, large enterprises (88 percent) are more likely to boost their budgets due to increased security concerns. In contrast, IT budgets at midsize organizations are more likely to grow due to corporate tax cuts: 35 percent of businesses with 500 to 999 employees reported increased tech budgets for 2019 because of lower taxes.

“Most organizations, particularly small businesses, are increasing IT budgets in 2019 to upgrade aging IT infrastructure and support digital transformation initiatives,” said Peter Tsai, Senior Technology Analyst at Spiceworks. “However, large enterprises, typically with more data and devices to lock down, are primarily increasing budgets due to growing security concerns. With more employees to target, larger organizations recognize the importance of boosting budgets to protect against phishing attacks and avoid potentially crippling malware.”

IT Budget Allocations

Organizations plan to spend 35 percent of their IT budgets on hardware in 2019, up by 4 percentage points year over year. Software and cloud budget allocations remain steady year over year at 26 percent and 21 percent respectively, while budget allocations for managed IT services grew by 1 percentage point to 14 percent of budgets. However, IT budget allocations vary greatly by company size.

Small organizations with less than 100 employees are planning to significantly increase their hardware investments from 31 percent of their total IT budget in 2018 to 42 percent in 2019.

Conversely, large enterprises plan to slightly increase their cloud budgets. Companies with 1,000 to 4,999 employees plan to allocate 22 percent of their IT budgets toward hosted/cloud-based services, up by 2 percentage points year over year, and enterprises with more than 5,000 employees plan to allocate 24 percent of their IT budgets toward cloud services, up by 3 percentage points year over year.

Budget highlights within each category include:

■ In hardware, budget allocations for desktops (18 percent), laptops (17 percent), servers (12 percent), and power and climate (7 percent) hardware top the list.

■ Top software budget allocations include operating systems (12 percent), virtualization (10 percent), productivity (10 percent), and security software (10 percent).

■ Online backup and recovery leads spending in the hosted/cloud-based services category: 15 percent of cloud budgets are allocated towards online backup/recovery, followed by email hosting (11 percent), online productivity (9 percent), and web hosting (9 percent) services.

■ In managed services, 11 percent of budgets will be spent on managed hosting, followed by managed storage/backup (10 percent), managed security (9 percent), and managed business applications (8 percent).

Technology Purchase Decisions

Spiceworks also examined the roles various individuals play in the technology purchase process. The president/CEO is involved the technology purchase decisions in 38 percent of organizations, line of business directors are involved in 32 percent of companies, and finance managers are involved in 28 percent of organizations.

However, across all company sizes, IT decision makers (ITDMs) are nearly twice as likely to be the sole decision maker for most technology categories when compared to business decision makers (BDMs). In small businesses, ITDMs are nearly four times as likely to be the sole decision maker. When involved, BDMs are more likely to either provide final approval or veto the deal after ITDMs have made their vendor and product selection.

Methodology: The survey was conducted by Spiceworks in July 2018 and included 780 respondents from North America and Europe. Respondents are among the millions of business technology buyers in Spiceworks and represent a variety of company sizes including small-to-medium-sized businesses as well as enterprises. Respondents come from a variety of industries including manufacturing, healthcare, non-profits, education, government, and finance.

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Aging IT Infrastructure Drives IT Budget Increases in 2019

Nine out of ten (89 percent) companies expect their IT budgets to grow or remain flat in 2019. Although factors driving budget increases vary significantly by company size, 64 percent of those planning to increase budgets are doing so to upgrade outdated IT infrastructure, according to the 2019 State of IT Budgets report from Spiceworks.

Across all company sizes, 38 percent of organizations expect IT budgets to increase in 2019, and 51 percent expect them to remain flat year over year. Organizations that expect budget increases next year anticipate a 20 percent increase on average, up from 19 percent in 2018. Only 6 percent of companies expect their IT budget to decrease in 2019, compared to 11 percent in 2018. Larger organizations are most likely to see their budgets grow: 56 percent of companies with more than 5,000 employees expect IT budgets to grow, and 43 percent expect them to stay the same in 2019.

When comparing the factors driving budget increases by company size, large enterprises (88 percent) are more likely to boost their budgets due to increased security concerns. In contrast, IT budgets at midsize organizations are more likely to grow due to corporate tax cuts: 35 percent of businesses with 500 to 999 employees reported increased tech budgets for 2019 because of lower taxes.

“Most organizations, particularly small businesses, are increasing IT budgets in 2019 to upgrade aging IT infrastructure and support digital transformation initiatives,” said Peter Tsai, Senior Technology Analyst at Spiceworks. “However, large enterprises, typically with more data and devices to lock down, are primarily increasing budgets due to growing security concerns. With more employees to target, larger organizations recognize the importance of boosting budgets to protect against phishing attacks and avoid potentially crippling malware.”

IT Budget Allocations

Organizations plan to spend 35 percent of their IT budgets on hardware in 2019, up by 4 percentage points year over year. Software and cloud budget allocations remain steady year over year at 26 percent and 21 percent respectively, while budget allocations for managed IT services grew by 1 percentage point to 14 percent of budgets. However, IT budget allocations vary greatly by company size.

Small organizations with less than 100 employees are planning to significantly increase their hardware investments from 31 percent of their total IT budget in 2018 to 42 percent in 2019.

Conversely, large enterprises plan to slightly increase their cloud budgets. Companies with 1,000 to 4,999 employees plan to allocate 22 percent of their IT budgets toward hosted/cloud-based services, up by 2 percentage points year over year, and enterprises with more than 5,000 employees plan to allocate 24 percent of their IT budgets toward cloud services, up by 3 percentage points year over year.

Budget highlights within each category include:

■ In hardware, budget allocations for desktops (18 percent), laptops (17 percent), servers (12 percent), and power and climate (7 percent) hardware top the list.

■ Top software budget allocations include operating systems (12 percent), virtualization (10 percent), productivity (10 percent), and security software (10 percent).

■ Online backup and recovery leads spending in the hosted/cloud-based services category: 15 percent of cloud budgets are allocated towards online backup/recovery, followed by email hosting (11 percent), online productivity (9 percent), and web hosting (9 percent) services.

■ In managed services, 11 percent of budgets will be spent on managed hosting, followed by managed storage/backup (10 percent), managed security (9 percent), and managed business applications (8 percent).

Technology Purchase Decisions

Spiceworks also examined the roles various individuals play in the technology purchase process. The president/CEO is involved the technology purchase decisions in 38 percent of organizations, line of business directors are involved in 32 percent of companies, and finance managers are involved in 28 percent of organizations.

However, across all company sizes, IT decision makers (ITDMs) are nearly twice as likely to be the sole decision maker for most technology categories when compared to business decision makers (BDMs). In small businesses, ITDMs are nearly four times as likely to be the sole decision maker. When involved, BDMs are more likely to either provide final approval or veto the deal after ITDMs have made their vendor and product selection.

Methodology: The survey was conducted by Spiceworks in July 2018 and included 780 respondents from North America and Europe. Respondents are among the millions of business technology buyers in Spiceworks and represent a variety of company sizes including small-to-medium-sized businesses as well as enterprises. Respondents come from a variety of industries including manufacturing, healthcare, non-profits, education, government, and finance.

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A new study by the IBM Institute for Business Value reveals that enterprises are expected to significantly scale AI-enabled workflows, many driven by agentic AI, relying on them for improved decision making and automation. The AI Projects to Profits study revealed that respondents expect AI-enabled workflows to grow from 3% today to 25% by the end of 2025. With 70% of surveyed executives indicating that agentic AI is important to their organization's future, the research suggests that many organizations are actively encouraging experimentation ...

Respondents predict that agentic AI will play an increasingly prominent role in their interactions with technology vendors over the coming years and are positive about the benefits it will bring, according to The Race to an Agentic Future: How Agentic AI Will Transform Customer Experience, a report from Cisco ...

A new wave of tariffs, some exceeding 100%, is sending shockwaves across the technology industry. Enterprises are grappling with sudden, dramatic cost increases that threaten to disrupt carefully planned budgets, sourcing strategies, and deployment plans. For CIOs and CTOs, this isn't just an economic setback; it's a wake-up call. The era of predictable cloud pricing and stable global supply chains is over ...

As artificial intelligence (AI) adoption gains momentum, network readiness is emerging as a critical success factor. AI workloads generate unpredictable bursts of traffic, demanding high-speed connectivity that is low latency and lossless. AI adoption will require upgrades and optimizations in data center networks and wide-area networks (WANs). This is prompting enterprise IT teams to rethink, re-architect, and upgrade their data center and WANs to support AI-driven operations ...

Artificial intelligence (AI) is core to observability practices, with some 41% of respondents reporting AI adoption as a core driver of observability, according to the State of Observability for Financial Services and Insurance report from New Relic ...

Application performance monitoring (APM) is a game of catching up — building dashboards, setting thresholds, tuning alerts, and manually correlating metrics to root causes. In the early days, this straightforward model worked as applications were simpler, stacks more predictable, and telemetry was manageable. Today, the landscape has shifted, and more assertive tools are needed ...

Cloud adoption has accelerated, but backup strategies haven't always kept pace. Many organizations continue to rely on backup strategies that were either lifted directly from on-prem environments or use cloud-native tools in limited, DR-focused ways ... Eon uncovered a handful of critical gaps regarding how organizations approach cloud backup. To capture these prevailing winds, we gathered insights from 150+ IT and cloud leaders at the recent Google Cloud Next conference, which we've compiled into the 2025 State of Cloud Data Backup ...

Private clouds are no longer playing catch-up, and public clouds are no longer the default as organizations recalibrate their cloud strategies, according to the Private Cloud Outlook 2025 report from Broadcom. More than half (53%) of survey respondents say private cloud is their top priority for deploying new workloads over the next three years, while 69% are considering workload repatriation from public to private cloud, with one-third having already done so ...

As organizations chase productivity gains from generative AI, teams are overwhelmingly focused on improving delivery speed (45%) over enhancing software quality (13%), according to the Quality Transformation Report from Tricentis ...

Back in March of this year ... MongoDB's stock price took a serious tumble ... In my opinion, it reflects a deeper structural issue in enterprise software economics altogether — vendor lock-in ...