IT budgets could actually be set to rise in 2023
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Despite the poor financial outlook for much of the world, a new study has claimed that many IT departments expect to increase their budgets in the coming 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 main causes of uncertainty when it comes to companies deciding where to invest their money.
The results show that 83% of companies surveyed are concerned about a potential recession in the coming year, while half plan to fine-tune spending in preparation for an economic slowdown. The trend shows greater concern from larger organizations with 500 or more employees.
Rising budgets?
Despite potential cutbacks in certain areas, including re-evaluating suppliers and third parties, staffing delays, and reducing non-essential spending, 51% of companies said they would increase their IT budgets by 2023 as employees continue to give preference to a hybrid work routine and companies are turning to more in-house IT solutions. In contrast, only 6% said they would reduce their technology spending.
Regardless, Vice President of SWZD’s Aberdeen Strategy & Research Subdivision Bryan Ball, said: “Without a fundamental change or shift in policy, the pressure on cost reduction and belt-tightening will be with us for some time to come, well into the future.” 2023.”
Should I invest in IT in 2023?
Most importantly, companies are looking to increase their IT budgets to upgrade legacy infrastructure, the report said. Responding to increasing security concerns comes in fourth, while supporting a remote workforce is the sixth most important reason, according to the survey.
If we dig a little deeper, many companies expect to see dating technology in the coming year, with both Windows Server 2012 and Windows 8 reaching the end of their life by December 2023.
Looking ahead, most notable is the two-year decline in the percentage of money spent on software (including security, productivity tools, and operating systems), hardware (including laptops, desktops, and servers), and cloud-based services (including productivity tools, file backup apps up and business support), which is expected to allow for an increase in managed services spending, although it remains by far the smallest of the four categories.
Also on the downward trend is gigabit internet, which is making room for the large-scale adoption of 5G, as well as automation moving aside to create room for growth in the Internet of Things (IoT).
Going forward, the study summarizes that “opportunities for technology vendors will still abound — even in the event of a recession over the next 12 months,” allowing companies to continue to increase productivity and reduce operating costs.