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IT Spending in 2016: What Does It Mean For IT Transformation (Infographic)

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If you are head of the IT department or working in the same nowadays, you are likely sharing the same fate as many IT managers: having to do more, but with less resource. IT is facing significant challenges this year as companies often view the department as an expense, and additional spend on projects like Windows 10 rollout remains a challenging sell without a concrete business case. With basically the same budget as last year, but less discretionary spending, IT has to turn to 'keeping the lights on' mode (Business as Usual) and try to make progress with limited resource as they tackle Windows 10 rollouts or hardware refresh projects.

Having a keen interest in how budgets are looking in 2016, we have looked at the latest analysis and summarized everything in a neat infographic for you:


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IT Budgets Remain Mostly Flat, Despite Increasing Revenues

While organizations may be enjoying increased profits, IT spending fails to rise commensurately, a new study finds. Indeed, in spite of increased average annual company revenue (56% of IT professionals expect increased revenues), IT budgets remain relatively flat (42% of pros expect to see no change in their IT budget this year), noted a recent report at Spiceworks.

This is placing a strain on IT resources as  they can expect to see delays in bringing in new hires (if they can add more personnel at all) while facing pressure to upgrade to Windows 10, refreshing hardware, moving to the cloud or fending off any potential security threats. In fact, in the ongoing struggle to allocate resources the most effectively, management is often motivated to continue with the same level of resource as the previous year, despite worrisome reports about the rise of security attacks and the increasingly complex hybrid environments that most IT professionals are being asked to support.

Stretching IT Resources: Doing Less With More

In 2016, IT staff will continue to be strained. IT professionals don’t expect their IT staff to increase in 2016, which means they’ll need to keep doing more… with less.

Security attacks continue to increase with no end in sight, but the budgets for IT aren't managing to keep pace with the level of intrusions: 59% of IT pros say their companies don't invest enough in security, noted Spiceworks.

Other priorities are emerging. Enterprises adopt an attitude of “if it ain’t broke, don’t fix it,” and are focusing their budgets on investing in technology that has reached end-of-life (EOL), followed by spending on increased growth requirements and upgrades. Consider that 66% of IT pros are still using Windows XP (EOL) somewhere in the organisation, and some 60% of them still run Windows Server 2003 and you can see why the priorities are moving in this direction.

Businesses Aren't Prepared To Handle Looming Security Threats

Approximately 75% of IT professionals responding to the Spiceworks survey said that they consider their organizations vulnerable to attacks on technology and IT security as well as disasters both natural and man-made.

The mounting risk seems to not be affecting budgets still, however, as 74% of the survey respondents indicated that security breaches making big news splashes have not prompted their organizations to change security practices. It remains unclear what type or size of publicized security risks will be enough to motivate stakeholders in the enterprise to improve their security, going forward.  With Windows 10 on the horizon, a good understanding of managing security upgrades moving forward is paramount to addressing this issue.

Hardware and Software Projects Remain the #1 Focus

Windows 10 is mostly a free upgrade for smaller businesses, but IT professionals indicate that they still will spend some additional money on hardware to support the rollout of their OS. Virtualization, OS, and productivity are expected to be the top software investments in 2016 at 15% each, noted the Spiceworks report. On the other hand, IT spending on security hardware, software, and services will remain flat over 2016, with IT professionals now saying that they are prepared to allocate 6% of their entire budget for security.

OS Initiatives Are #1 Priority For Smaller Businesses

IT professionals say their top OS initiatives for 2016 are upgrading to Windows 10 and migrating from Windows Server 2003. They have allocated 47% of their budget to Windows 10 migration, noted the Spiceworks report.

About 76% of IT professionals surveyed said they now use server virtualization and provide more support in this area than they do to for BYOD policies and their employees’ mobile devices. Keep in mind that just 21% of respondents have adopted advanced security solutions even in the face of heightened security attacks on enterprises.

Windows 10 Adoption Within The Enterprise

The amount of spending on software by enterprises worldwide is expected to reach $321 billion in 2016, according a recent report at InfoWorld citing Gartner statistics. While this represents a 4.2% increase from the previous year, Gartner predicting delays in enterprise adoption of Windows 10 because of a decrease in IT discretionary spending as companies are laser-focused to cut costs wherever possible to offset what they are spending on digital transformation initiatives

Enterprise IT departments have continued questions on how Microsoft will manage Windows 10 in such areas as updates and browser compatibility that will need to be addressed before they can commit to making the transition.

When they reach the point where an upgrade makes sense for their workflow as well as their budget, they’ll need to use dedicated migration tools for Windows 10 and Office 365 to work the most cost-effectively. On average, enterprise IT departments will have to budget about $493 per to be migrated device with an IT migration management tool and up to $693 per migrated desktop without such a tool, according to Juriba’s latest estimate.

Overall, IT spending will grow by 0.6% this year, rising from $3.52 trillion in 2015 to $3.54 trillion in 2016, according to the latest predictions in Gartner’s Worldwide IT Spending Forecast for 2016. Data center spending should amount to $175 billion while software spending will hit $326 billion. The amount IT will spend on devices is predicted to reach $641 billion and costs of purchased IT services will amount to $940. The rise of premium mobile devices and their ability to substitute for desktop and laptop usage by employees out in the field is anticipated to drive more migration to Windows 10, noted Gartner.

How your particular enterprise company plans to handle IT spending this year will naturally depend on a wide number of factors. After all, no two organizations will have identical requirements or motivations for projects such as upgrades, migration to Windows 10 or security assessments.

Juriba's Guidance: Manage Your "Business As Usual"

IT professionals are aware of growing risks to their technological and software infrastructure from looming security threats such as malware, hacker intrusions, and other security breaches as well as the risks of having outdated operating systems and software running. However, management does not and they won't prioritize IT until it's too late! Consequently, IT will have to manage the impending chaos proactively as business as usual, which requires an exact representation on your IT landscape and a way to pro-actively manage your assets. Accordingly, IT managers should go over their budgets carefully to ensure they can protect their organization from natural disasters as well as criminal attacks despite their limited resources and keeping their software up-to-date.

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