Money’s tight, but cloud services are ripe for IT investment

September 26, 20173 Minute Read

IT are grappling with flat budgets, and all the while cloud services continue becoming more prevalent. That’s one of they key takeaways from Spiceworks research—which also forecasted increases in the adoption of 3D printing, artificial intelligence, and virtual reality—even as global political uncertainty casts doubt over IT pros’ willingness to purchase products and services.

Following the money can speak volumes about the state of IT, especially when there’s precious little cash to spare. Most IT buyers will see stagnant spending in the coming year, as well as a stalemate in terms of staffing, as nearly two-thirds don’t expect any changes. Meanwhile, IT pros will continue to do more with less, but it appears they’ll accomplish this by leveraging the cloud.

The forecast isn’t all that different from 2016, as IT pros expect budgets and annual revenue to level off, staffing to maintain, and technology purchases to be driven mostly by the requirements of the business. The report includes survey results from nearly 900 IT buyers, as well as social data from conversations within the Spiceworks professional network, which is used by millions of IT pros.

Tech spend budgets don’t lie

A tight budget calls for what? Business needs and priorities. For IT teams stretched thin and looking to innovate, the cloud comes in with myriad possibilities: services both IT and the business can’t pass up. Cloud’s getting priority because it brings the business everywhere (increased mobility), automates backups (the possibility for increased security), and gives access to services users want and need for work (increased productivity and efficiency).

IT buyers still think hardware and software are hot properties, even though they expect to spend less on both this year. Cloud services have better odds, as 38 percent of IT pros see them as either very or extremely important to their current business practices; 47 percent said such services will be important in the future.

The numbers don’t lie, and the real value of cloud services is reflected in the increased use of Infrastructure as a Service (IaaS), which saw some growth from 11 percent of investment in 2015 to 15 percent in 2016. One network and system administrator said he loads up on as many managed cloud services as possible, including Office 365, with managed backup and antivirus capabilities.

The Spiceworks survey also expects spending on cloud to make a little headway in 2017, with email hosting seeing further adoption as online backup and recovery usage stays flat and web hosting drops slightly. The top investment for the year will be IT services at 17 percent, which is actually down 2 percent from 2016. When it comes to email hosting, those numbers are reversed, as investment in cloud as a percentage of the cloud-based budget will be 19 percent.

Companies really showing up to work

Where there’s demand, you can bet the key players in tech will supply. Google and Amazon are the two biggest kids on the cloud playground of course, with 49 percent of respondents watching Google and 34 percent watching Amazon. Amazon Web Services eclipsed Microsoft, which came in third at 21 percent. One company that didn’t make the top 10 is Oracle, which must sting a little—it focused its efforts on cloud applications even while acknowledging that enterprise IT budgets are likely to remain flat, as IT World Canada explains.

Cloud is seen as key to digital transformation, but the findings of the Spiceworks report aren’t outliers. We’ve hit a tipping point—we’re now living in a cloud-first era, with more than half of all enterprises with 500 or more people are now choosing cloud as the default for IT projects. With teams focusing their limited budgets on cloud initiatives, it’s an area of IT that’s sure to keep gaining weight well into next year.

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