Spiceworks: IT Spending to Rise 18% in North America, Europe in 2020
SPICEWORKS SPICEWORLD 2019 — Business IT spending across North America and Europe is expected to rise by an average of 18% in 2020 as businesses continue to work to replace old outdated technologies and solve other IT challenges, according to the latest annual State of IT study compiled by help desk and business networking vendor Spiceworks.
Of some 1,005 business technology buyers interviewed from a wide variety of companies from small to large, about 44% of the study’s respondents reported that their companies would be increasing their IT budgets by an average of 18% in 2020, compared to about 8% of the respondents who said their IT budgets will shrink.
“It’s good news for the channel,” Peter Tsai, senior technology analyst for Spiceworks, told Channel Futures here at the company’s annual SpiceWorld conference in Austin, Texas. “There should be more money out there to spend.”
Asked in the survey why they will be increasing their IT budgets in 2020, 64% of the respondents who said they will be raising their budgets said that the biggest driver for the move is to replace outdated infrastructure, said Tsai. Some 47% of the respondents who said they will spend more said it was due to increased security spending, while 47% also pointed to increased IT needs due to more employees and the need for more hardware and software licenses.
About 45% of the respondents who said they will spend more said the increases also will be used to boost increased priorities on IT projects, such as Microsoft Windows Server end-of-life initiatives.
The biggest areas where increased IT spending is expected by rankings is in hardware, software, the cloud and in managed services, said Tsai. About one-third of the expected increase will be seen in hardware, the report continued.
“We know from previous research approximately how much of that spending is going to go to channel partners,” said Tsai.
Earlier this year, the Spiceworks State of Servers report found that about one-half of all enterprise IT buyers buy directly from vendors, while about 46% of enterprises buy from VARs through the channel. Some 36% of small- and medium-size businesses with fewer than 100 employees typically buy from VARs, the report continued.
The top drivers for new hardware, software and services purchases in 2020 will be dealing with end of life products, which was mentioned by about 60% of the respondents; initiating refresh cycles, mentioned by about 56% of the respondents; and building out for business growth, mentioned by about 50% of the respondents, said Tsai.
“If channel partners understand the concerns of their clients, they can best know how to serve them,” he said. “They know how to help them.”
The annual 2020 State of IT study found that much of the new spending will help many businesses deploy cutting-edge technologies to replace outdated infrastructure while also addressing increasing IT security concerns. The 44% of businesses that say they will increase their IT spending in 2020 compares to about 38% that said they would increase their IT spending in the 2019 Spiceworks State of IT survey.
Also notable in the report is that some one in four enterprises surveyed said a recent security incident is responsible for their decision to increase IT spending next year, while only 4% of small businesses said that was a factor in their decisions.
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