2018 State of IT: Trends, Budgets & Purchase Drivers

State of IT

The annual report on IT
budgets and tech trends

In an effort to uncover exactly how technology purchases will play out in the coming year, we surveyed more than one thousand IT buyers across North America and Europe. We’ve mapped out data on the latest IT trends including budgetary breakdown (IT spending booty, anyone?), data compliance, tech adoption, and the general state of IT.

Key Findings

IT budgets are expected to stabilize and (in many cases) grow in 2018, leading to a boost in IT staffing.

Thanks to globalization and an increasingly mobile workplace, budgets for cloud-based services are on the rise.

Blimey! Few IT departments are budgeting for GDPR, which could end up costing companies quite a few shillings in fines.

From IT automation to emerging technologies (AI, 3D printing, VR), IT departments are jumping on board with exciting new tech.

Passage One

Budgetary Bounty
in 2018

Smooth sailing for tech spending…

Aye, you be hearing right:

Most companies across the globe will be keeping IT budgets steady, or giving them a boost over the next 12 months. In fact, close to half of companies (44%) expect budgets to increase while 43% anticipate no change at all. Only 11% expect to see their budgets decrease.

Companies that expect budgetary gains foresee a 19% jump in IT budgets, on average. Why such a positive outlook? An ever-increasing dependence on technology in the workplace could be one explanation for these sudden favorable winds.

Expected IT budget change in 2018 Total

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Revenue on the rise and IT staffing looks up…

As economic trends continue upward, company revenues are expected to chart the same course. In fact, 60% of respondents expect their corporate earnings to increase in the coming year. And it’s likely business will allocate a good portion of that loot toward new tech, which means 2018 could be a swashbuckling good time for tech marketers.

Expected revenue change in 2018 Total

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Of course, it’s going to take more hands on deck to manage new hardware, software, and services. As a result, companies will be staffing up their trusty crew of IT pros throughout the year ahead.

Expected change in IT staff for 2018 Total

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Across the Seven Seas in 2018, more IT departments will swell in size than shrink. And the mega vessels (larger companies) forecast the biggest boost in staffing. More than 60% of companies with 500+ employees expect to increase IT staff while 70% of large enterprises (5000+) report they’ll hire more IT pros in 2018.

Passage Two

Lay of the
Budget Land

Far reach of the riches…

It’s clear IT crews will have plenty to work with in their 2018 coffers, but how can we expect to see budget play out on the open IT seas?

31% Hardware

26% Software

21% Hosted & Cloud-based Services

15% Managed Services

The lion’s share of the budget bounty will be spent on hardware (31%), with software (26%), hosted/cloud-based services (21%), and managed services (15%) rounding out the tech haul this coming year.

IT budget allocation in 2018 Total, Regional, and by Company Size

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Hardware
Software
Hosted/cloud-based services
Managed services
Don't Know

When looking for differences among categories by company size, it appears the big outfits are more likely than smaller companies to allocate budget to managed services. Mid-size orgs (100-499 employees) are slightly less likely to invest in hosted/cloud-based services than both the largest and the smallest companies.

The tides be turning…

Although hardware and software will be staking claim to the largest share of budget territory in 2018, hosted/cloud-based services are closing in, and quickly growing into a formidable force. Among spending categories, the highest percentage of businesses reported an increase in cloud budget as compared to 2017. More businesses also reported a decrease in hardware budgets in the last year.

But the spend isn’t distributed evenly across all company sizes. For example, bigger fleets are more likely to report an increase in cloud spending than smaller companies. In fact, 66% of companies with 1,000-4,999 employees reported an increase in hosted/cloud budgets while 72% of companies with 5,000+ employees reported an increase.

Change in budget allocation in the past year

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How will the gold coins stack up? To find out, we peered through our spyglass (with our one good eye) for a closer look under the lid of each main budget category.

17% Desktops

15% Laptops

13% Servers

8% Networking

Hardware haul: desktops (17%), laptops (15%), servers (13%), and networking (8%) fill up the biggest portion of IT budgets.

Hardware budget breakout for 2018 Total/Regional

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Desktops
Laptops
Servers
Networking
Tablets & Mobile
Security
Power and climate
Printers
External Storage
Telephony
Peripherals
Other
Don't Know

A curious trend: When looking at hardware budget breakdown by company size, smaller and mid-size outfits are more likely to invest in desktops in 2018. Larger companies are much more likely to invest in power and climate to help ensure smooth sailing in the server room.

11% Operating Systems

10% Security Software

10% Productivity Software

9% Virtualization

Software haul: Operating systems (11%), security software (10%), productivity software (10%), and virtualization (9%) round out the top budget categories.

Software budget breakout for 2018 Total, Regional, and by Company Size

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Operating Systems
Security
Productivity
Virtualization
Industry-specific apps
Business support apps
Backup/disaster recovery
Database management
IT management
Email servers
Communications
Developer tools
Other
Don't know

Looking at software budget breakdown by company size, smaller crews report spending more of their total software budget on productivity software and security in 2018. In contrast, the bigger bands of buccaneers will be spending more of their software budget on virtualization and database systems.

15% Online Backup/Recovery

10% Productivity Solutions

9% Email Hosting

9% Web Hosting

Hosted/cloud services haul: Online backup/recovery (15%), productivity solutions (10%), email hosting (9%), and web hosting (9%) rise to the top of the cloud pack.

Hosted/cloud budget breakout for 2018 Total, Regional, and by Company Size

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Online backup/recovery
Productivity
Email hosting
Web hosting
Business support apps
Industry-specific apps
Security solutions
IaaS
Cloud storage
IT management
PaaS
Developer tools
Communications
DaaS
Other
Don't know

Looking at cloud services budget breakdown by company size, smaller gangs will invest more in online backup and web hosting while mid-size orgs will be setting their sales (pun intended) on IaaS and cloud-based security solutions. Larger crews report spending more of their cloud budget on PaaS.

12% Managed Hosting

9% Managed Storage/Backup

9% Managed Hardware Support & Maintenance

9% Managed Security

Managed services haul: Managed hosting (12%), managed storage/backup (9%), managed hardware support and maintenance (9%), and managed security (9%) will be taking home the biggest portions of the budget bounty.

Managed services budget breakout for 2018 Total, Regional, and by Company Size

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Managed hosting
Managed storage/backup
Managed hardware support
Managed security
Managed networking
Managed IT help desk
Managed business apps
Managed communications
Managed cloud infrastructure
Managed print services
Managed mobile computing
Other
Don't know

Looking at managed services budget breakdown by company size, smaller companies are more likely to shell out for managed hosting, while larger crews are more likely to invest in managed cloud infrastructure in 2018.

Passage Three

Powers of the
Purchase Fleet

Drivers that influence new tech

What motivates IT buyers to spend their hard-earned gold as they embark upon their purchase journey? More than half of respondents reported end-of-life and growth/additional needs (followed by upgrade/refresh cycles) as the strongest forces driving them on the voyage to new tech.

Especially in North America, end-of-life ranks as the top influencer for IT purchases.

In Europe, end-of-life is neck and neck with growth/additional needs in the rankings of top driving forces.

Top drivers of new hardware, software, and/or service purchases Total

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When breaking it down by company size, end-of-life leads the pack for smaller crews (1-99 employees). For mid-size outfits with 500-999 employees, budget availability is more likely to steer the ship. New technology features are a stronger purchase motivator for larger organizations than for smaller companies.

Trust helps anchor the deal when it comes to major IT expenses. But what exactly motivates IT buyers to join forces with a channel partner or reseller over buying directly from vendors?

Price aside, existing relationships, reputation, prior positive experience, and ease of purchase all rank as top reasons why IT pros form an alliance with third party sellers.

Top drivers to purchase solutions through channel partners/resellers Total

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In terms of size, small brigades value price and existing relationships the most. A positive prior experience is a greater motivator for orgs with less than 1,000 employees to take the reseller route than it is for larger companies.

Passage Four

Ahoy! IT Trends on
the Horizon

From GDPR and cloud to cool new tech

Whether it’s jumping aboard mandatory data compliance, getting an under-the-hull peek at cloud drivers, or squinting through the spyglass at emerging technologies, our sea legs are going the distance.

GDPR (General Data Protection Regulation) is designed to protect the privacy and personal data of European Union (EU) residents and will go into effect May 2018. But seeing as though the dense, 99-article regulation isn’t exactly an easy read, a more suitable acronym might be GDPaarrrgghh!

In fact, many companies are unclear what steps they need to take to avoid getting hit with major fines and being forced to walk the non-compliance plank next spring. Case in point: As of mid-2017, 57% of respondents still haven’t allocated budget for GDPR or are unclear whether or not GDPR budget exists.

GDPR Budget Allocation Total

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North American companies are less likely to have set aside budget for GDPR, as many (perhaps erroneously) might assume they do not have to comply with the regulation.

On the other side of the pond, European companies are more likely to have budget allocated and ensure GDPR fines won’t sink their mighty ships.

Looking at GDPR preparations by company size, it’s clear enterprises are taking the threat seriously. They report having more budget set aside for GDPR and list higher amounts of budget allocated for compliance. They’re probably tying up their sails because they’re more likely to collect protected types of data — and the larger a company’s revenue, the more catastrophic the fines could be.

But it’s clear many outfits, especially North American companies that collect international data, could be heading for rough waters whether they know it or not.

Cloudy with a chance of… more cloud

Thanks to an increasingly mobile workforce, the potential for more collaboration across oceans, and the flexibility and scalability of cloud solutions, more workloads are being supported by cloud-based infrastructure services.

42% Communications/Collaboration

41% Backup/Disaster Recovery

29% Productivity Apps

A few of the most common workloads supported by cloud infrastructure include communications/collaboration (42%), backup/disaster recovery (41%), and productivity apps (29%).

And as the regional trend winds blow, North American companies are more likely to support backup/disaster recovery with cloud infrastructure than their European counterparts. At the same time, European companies are more likely to sail towards the cloud line for eCommerce.

Current workloads supported by cloud-based infrastructure services Total

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In terms of company size, the smaller outfits more often turn their rudders toward cloud infrastructure for communication and collaboration. Large companies (more than 1,000 employees) report greater usage of cloud-based infrastructure to support software development, eCommerce, and R&D/engineering purposes.

When it comes to how companies foresee their workloads moving to cloud infrastructure over the next 12 months, communication/collaboration is top o’ the mast while backup/disaster recovery is close behind.

Companies with 1,000+ employees are shouting “cloud ho!” because they’re more likely to increase use of all cloud-based infrastructure services in the next 12 months.

Change in workloads supported by cloud-based infrastructure (Percent planning to increase use in the next 12 months) Total

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42% Access to Data Anywhere

38% Disaster Recovery Capabilities

37% Better Flexibility

36% Reducing the Support Burden on IT Staff

What factors are driving companies to steer towards cloud? Top drivers for moving workloads to the cloud include providing access to data anywhere (42%), enhancing disaster recovery capabilities (38%), enabling better flexibility (37%), and reducing the support burden on IT staff (36%).

Top drivers of moving workloads to the cloud Total

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There are some regional differences when it comes to top cloud drivers, too. For NA companies, reducing support burden on IT and enhancing disaster recovery rank significantly higher than in Europe. For European crews: improving collaboration across offices is more valuable.

In terms of company size, mid-size troops (500-999 employees) are more likely to move to the cloud to enhance disaster recovery capabilities. Larger companies (1,000-4,999 employees) are more likely to team up with cloud services providers in order to boost data security.

Sailing into the tech future…

Thar be new tech on the horizon! When it comes to technology trends, more than 40% of respondents state they’re currently using IT automation. Close to 40% are using advanced security solutions, and 30% are already on board with software-defined storage/virtual SAN.

Currently, 29% of organizations have adopted IoT, 18% have adopted VR, and 13% have adopted AI. And adoption is expected to grow significantly in the next 12 months. An additional 19% of organizations plan to adopt IoT next year while another 14% and 17% plan to adopt VR and AI, respectively.

Adoption of emerging tech trends is even higher in larger organizations. In fact, about 30% of organizations with 1,000+ employees say they’ve adopted AI, and an additional 25% plan to adopt it next year. Perhaps the rise in IT budgets is leading more companies to jump on the latest trends.

Adoption of Technology Trends Total/Regional

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Adoption of Technology Trends by Company Size

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Passage Five

The Voyage Ahead

Hidden treasure awaits…

From budgetary bounty in 2018 to expected increased in revenue, purchase paradise might be the reality in the coming year. Tech marketers (marketeers?) would be wise to invest their campaign shillings in cloud services.

While IT buyers might be below the deck when it comes to GDPR compliance, educational content on the repercussions of the regulation could help build trust and lasting relationships… and help convince companies they need to pay attention before the ship has sailed.

And while they have long seemed far out on the horizon, more and more companies are adopting new technologies like IT automation, AI, software-defined storage, and more. It would be wise for marketers to keep an eye trained on the emerging technologies that could become the next hot, new trend.

2018 holds great promise for IT departments and marketing professionals alike, and exciting changes are afoot. After years of stagnation, increasing IT budgets and company revenues (along with a rising economic tide) just might help propel IT pro pirates and marketer mariners along their next great voyage.

State of IT

Profile

Band of Merry Respondents

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State of IT

About Spiceworks

Voice of IT

ABOUT SPICEWORKS

Spiceworks is a professional network that provides millions of IT pros with the tools, content, and community they need to get their jobs done. Those users have attracted the attention of thousands of technology brands who use Spiceworks to reach IT professionals during their workday. Together, we’ve created the world’s most trusted and vibrant IT destination.

ABOUT SPICEWORKS VOICE OF IT ®

Spiceworks’ Voice of IT shares statistics, trends, and opinions collected from millions of IT professionals on the global technology issues that are important to them. To find out more about our research capabilities, email [email protected].

Follow Spiceworks on Twitter and connect with Spiceworks on Facebook.

For more information visit: www.spiceworks.com

For other Spiceworks Voice of IT reports visit: www.spiceworks.com/marketing/resources/

This report contains information of facts relating to parties other than Spiceworks. Although the information has been obtained from, and is based on sources that Spiceworks believes to be reliable, Spiceworks does not guarantee the accuracy, and any such information might be incomplete or condensed. Any estimates included in this report constitute Spiceworks’ judgment as of the date of compilation, and are subject to change without notice. This report is for information purposes only. All responsibility for any interpretations or actions based on the information or commentary contained within this report lie solely with the recipient. All rights reserved. 2018.

the 2018
State of IT

The annual report on IT
budgets and tech trends

Budgetary Bounty
in 2018

Lay of the
Budget Land

Powers of the
Purchase Fleet

Ahoy! IT Trends on
the Horizon

The Voyage Ahead

Profile

About Spiceworks

Get tech marketing tips in your inbox!

Get tips in your inbox!

the 2018 State of IT

The annual report on IT budgets and tech trends

Budgetary Bounty in 2018

Lay of the Budget Land

Powers of the Purchase Fleet

Ahoy! IT Trends on the Horizon

The Voyage Ahead

Profile

About Spiceworks

Get tech marketing tips in your inbox!

Get tips in your inbox!

the 2018
State of IT

The annual report on IT
budgets and tech trends

Budgetary Bounty
in 2018

Lay of the
Budget Land

Powers of the
Purchase Fleet

Ahoy! IT Trends on
the Horizon