Despite dire financial outlook for much of the globe, a new study has claimed many IT departments are expecting to increase their budgets in the next year.
Spiceworks Ziff Davis (SWZD)’s 2023 State of IT report (opens in new tab) cites the highest levels of inflation in 40 years, and the upward trend in energy prices, as some of the key drivers of uncertainty when it comes to businesses deciding where to invest their cash.
The results show that 83% of the companies surveyed are concerned about a potential recession in the next year, while half plan on fine tuning their spends in preparation for an economic slowdown. The trend shows a greater level of concern coming from larger organizations with 500 or more members of staff.
Budgets on the rise?
Despite potential cutbacks in certain areas, including re-evaluating vendors and third parties, hiring slowdowns, and reducing non-essential expenditure, 51% of the companies said that they would increase their IT budgets in 2023 as employees continue to prefer a hybrid working routine, and companies turn to more in-house IT solutions. In contrast, only 6% said that they would reduce their technology spend.
Regardless, Vice President of SWZD’s Aberdeen Strategy & Research subdivision Bryan Ball, says: “Without some fundamental change or shift in policies, the pressures on cost reduction and belt-tightening will be with us for some time, well into 2023.”
Should I invest in IT in 2023?
Above all else, companies are most keen to increase their IT budgets to upgrade outdated infrastructure, the report noted. Responding to increasing security concerns comes in at fourth place, while supporting a remote workforce is understood to be the sixth most important reason according to the survey.
Looking ahead, most noteworthy is the two-year decline in the percentage of money driven towards software (including security, productivity tools, and operating systems), hardware (including laptops, desktops, and servers) and cloud-based services (including productivity tools, file backup, and business support apps), which is expected to make room for an increase in managed services spending, though this remains the smallest of the four categories by far.
Also on the downward trend is gigabit internet, which makes room for the widescale adoption of 5G, as is automation which steps aside to create space for a growth in the Internet of things (IoT).
Moving forward, the research summarizes that “opportunities for tech vendors will still be plentiful – even in the event of a recession over the course of the next 12 months”, which will allow businesses to continue to increase productivity and decrease operational costs.