Spiceworks It Budget Report 2014

2014 IT Budget Report 1You Back, Union Jack? 1

2014 State of IT Budget ReportA microscopic view of North America IT spend in 2014.

J a n u a r y 2 0 1 4 | # I T B u d g e t s

Fre e I T re p o r t s o n to d ay ’s h o t te s t te c h to p i c s a n d t re n d s.

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SPICELABP R O P E R T Y O F T H E

2 Spiceworks VoIT Report: January 2014 | #ITBudgets

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TABLE OF CONTENTS

01 2014: THE THEORY OF POSITIVITY

02 PERIODIC TABLEOF TECH

03 ATOMIC MASS: HARDWARE

05 ATOMIC MASS: CLOUD

06 ATOMIC MASS:MANAGED SERVICES

PAGE 06

PAGE 08

PAGE 10

PAGE 16

PAGE 20

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04 ATOMIC MASS: SOFTWAREPAGE 14

07 IT PURCHASING,MAGNIFIEDPAGE 22

08 EVALUATING ITPAGE 24


ADDING IT UP

According to Forrester, IT budgets in North America are estimated to reach $976 billion in 2014. So how do IT pros plan to divvy up the dough over the coming year?

And how should savvy tech marketers laser focus their campaigns? We threw on our trusty lab coats and peered deep into the inner workings of 2014 IT budget plans.

After careful examination of our one-of-a-kind user base, we refined our data to give you the essence of IT investment.

North American IT pros plan to spend an

average of $302,000 on hardware, software,

and hosted & managed services in 2014.

We broke down the elements to see what

technologies will get the mass of IT dollars.

2014 IT Budget Report 5

THE METHODOLOGYKEY FINDINGS

IT budgets are gaining a positive charge. Close to half of IT pros are expecting to

see an increase in their budgets in 2014 with an average $302,000 to spend on hardware, software, cloud and managed services.

With the continued evolution of server virtualization and Windows XP coming

to the end, hardware and software projects will continue to consume 75% of the budget... the mass of IT spend.

Cloud services, while receiving a lot of air time, still only account for 14% of budget

spend. As IT pros continue building comfort with security and control of cloud services, this will likely see an increase in the future.

By surveying 450 IT pros, we were able to study the molecular makeup of their budget plans for 2014. From laptops to virtualization to cloud services, we busted out the tech microscope to see where those dollars are headed, how spending is handled within companies, and the resources IT pros use as they make tech purchasing decisions.

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012014: THE THEORYOF POSITIVITY IT pros have chimed in with an edu-cated hunch: 2014 revenues, budgets and headcounts are likely to increase in the coming year for many compared to 2013. Over half of respondents predict revenues will increase, nearly half foresee budgets getting a boost, and almost half predict headcount… to head up.

What’s with the positive outlook? The atmosphere of confidence is likely due to broader North American economic trends. With unemployment down, the stock market up, and credit expansions to both businesses and households, there appears to be momentum toward good old-fashioned growth.


Let’s start planning our IT budgets now! Actually, how about two months from now? On second thought, five months ago sounds about right. When it comes to a concrete start date for tech budget planning, well… a few variables factor in. So, what’s the deal with IT pros being a little… uncertain on the science of timely budgeting?

According to our research, smaller organiza-tions seem to operate on a less structured calendar than their larger counterparts. What’s that mean for tech marketers? Knowing when to make contact might be more art than science, but IT pros do have a preference.

TECH BUDGET PLANNING: UNPREDICTABLE ELEMENTS

Revenue change

IT Budget change

Headcount change

Increase Stay the same Decrease Don’t know

57%

20%

10%

13%

47%

32%

16%

5%

45%

10%5%

39%

COMPANY REVENUE, BUDGET & HEADCOUNT CHANGES FROM 2013 TO 2014:

0

5

10

15

20

25

30

3531%

No standard budget

planning date

Oct - Decof 2013

July - Septof 2013

Apr - Jun of 2013

Jan - Marof 2013

31%

16%

10%12%

WHEN 2014 IT BUDGET PLANNING KICKED OFF

Subatomic Insight: Find out when it’s best to engage with IT pros.

http://community.spiceworks.com/topic/422225-when-do-you-consider-purchasing-products-services-for-next-year


02PERIODIC TABLE OF TECH What tech elements will IT pros invest in over the coming year? There’s no shortage of options on the table, both tried-and-true and more recently discovered. And while IT pros might be all over the spectrum on budget start dates, they do have a clear focus on where they’ll be directing those dollars with hardware projects taking an average of 44% of the IT budget, while 31% of the IT budget will go to software projects.

hardware

Hw1

software

Sw2

cloud

Cld3

managed ser.

Ms4

nitrogen

14.007N

7

helium

He4.0026

2

neon

Ne20.180

10�uorine

F18.998

9oxygen

O15.999

8carbon

C12.011

6boron

B10.811

5

argon

Ar39.948

18chlorine

Cl35.453

17sulfur

S32.065

16phosphorus

P30.974

15silicon

Si28.086

14aluminium

Al26.982

13

krypton

Kr83.798

36cloud

Cld3

selenium

Se78.96

34arsenic

As74.922

33germanium

Ge72.64

32gallium

Ga69.723

31zinc

Zn65.38

30copper

Cu63.546

29nickel

Ni58.693

28cobalt

Co58.933

27iron

Fe55.845

26managed ser.

Ms4

chromium

Cr51.996

24vanadium

V50.942

23titanium

Ti47.867

22scandium

Sc44.956

21calcium

Ca40.078

20potassium

K39.098

19

magnesium

Mg24.305

12sodium

Na22.990

11

beryllium

Be9.0122

4lithium

Li6.941

3

hydrogen

H1.0079

1

xenon

Xe131.29

54iodine

I126.90

53tellurium

Te127.60

52antimony

Sb121.76

51tin

Sn118.71

50indium

In114.82

49cadmium

Cd112.41

48silver

Ag107.87

47palladium

Pd106.42

46rhodium

Rh102.91

45ruthenium

Ru101.07

44technetium

Tc[98]

43molybdenum

Mo95.96

42niobium

Nb92.906

41zirconium

Zr91.224

40yttrium

Y88.906

39software

Sw2

rubidium

Rb85.468

37

radon

Rn[222]

86astatine

At[210]

85polonium

Po[209]

84bismuth

Bi208.98

83lead

Pb207.2

82

dysprosium

Dy162.50

66terbium

Tb158.93

65gadolinium

Gd157.25

64europium

Eu151.96

63samarium

Sm150.36

62promethium

Pm[145]

61neodymium

Nd144.24

60praseodymium

Pr140.91

59cerium

Ce140.12

58lanthanum

La138.91

57

barium

Ba137.33

56caesium

Cs132.91

55

roentgenium

Rg[272]

111darmstadtium

Ds[271]

110meitnerium

Mt[268]

109hardware

Hw1

bohrium

Bh[264]

107seaborgium

Sg[266]

106dubnium

Db[262]

105rutherfordium

Rf[261]

104radium

Ra[226]

88francium

Fr[223]

87

lutetium

Lu174.97

71ytterbium

Yb173.05

70thulium

Tm168.93

69erbium

Er167.26

68holmium

Ho164.93

67

thallium

Tl204.38

81mercury

Hg200.59

80gold

Au196.97

79platinum

Pt195.08

78iridium

Ir192.22

77osmium

Os190.23

76rhenium

Re186.21

75tungsten

W183.84

74tantalum

Ta180.95

73hafnium

Hf178.49

72

berkelium

Bk[247]

97lawrencium

Lr[262]

103nobelium

No[259]

102mendelevium

Md[258]

101fermium

Fm[257]

100einsteinium

Es[252]

99californium

Cf[251]

98curium

Cm[247]

96americium

Am[243]

95plutonium

Pu[244]

94neptunium

Np[237]

93uranium

U238.03

92protactinium

Pa231.04

91thorium

Th232.04

90actinium

Ac[227]

89


Despite the hype surrounding cloud it’s considerably lower on the periodic tech scale, though still in the top three at 14%. A few reasons cloud is further down the rung: IT pros are hesitant to make infrastructure changes, they still have lingering security concerns, and they haven’t worked out some compliance issues.

ALLOCATION OF 2014 ANNUAL BUDGET

Subatomic Insight: See why cloud isn’t topping the IT budget priority list.

Managed services projects

11%

Hosted/cloud-basedservices projects

14%

Software projects

31%

Hardware projects

44%

(What percentage of your annual IT budget do you plan to allocate to each of the following areas?)

Average annual North American budget = $302,000

http://community.spiceworks.com/topic/422228-are-cloud-services-moving-up-in-your-budget-priority-list


03ATOMIC MASS: HARDWARE

Let’s get physical. Trusty old desktops, laptops and networking equipment still reign supreme in the top row of the tech table budget plan. So why is hardware slated for the largest chunck of the overall IT budget from Spiceworks users in 2014? IT departments are laser focused on the need for faster, more powerful systems to drive existing software.

And with Windows XP (Getting Over Your XP) headed for its end of life black hole, many IT departments are decom-missioning the old OS and buying at least a few new desktops and laptops.

Other spending seems to be headed towards servers and networking. Likely factors: The popularity of virtualization, and the desire to purchase more powerful servers and faster networking gear opti-mized for the technology.

A closer examination: Within the hardware quadrant, what specific types of tech do IT pros plan to purchase in 2014? Desktops, networking equipment, laptops, and servers rank as the top four anticipated hardware buys over the coming 12 months.

hardware

Hw1

Subatomic Insight: Check out how Spiceworks users plan to spend on hardware in 2014.

http://issuu.com/spiceworks/docs/voitreport-windows-xp-end-life-fina


http://community.spiceworks.com/topic/422229-what-s-driving-your-2014-hardware-purchasing-plans


These categories map fairly closely to how companies will budget in 2014. Desktops top the chart with IT pros stating they’ll spend an average of 26% of their hardware budget on these devices. Servers rank second with an average of 19%, laptops place third with an average of 14%, and networking equipment is close behind on the scale with an average of 13% of the hardware budget.

TOP 5 PLANNED HARDWARE PURCHASES IN 2014(Percentage of respondents)

TOP 5 HARDWARE INVESTMENTS(As a percentage of hardware budget)

10 20 30 40 50 60 70 80

73%Networking (wireless, routers, switches, �rewall)

71%Laptop

69%Server

50%Printers

79%Desktop

Printers

26%

Server

Laptop

Networking (wireless, routers, switches, firewall)

Desktop

13%

14%

19%

6%


For the top five hardware purchases IT departments plan to spend big bucks on in 2014, how much of it will go to refreshing existing infrastructure vs. adding new devices? Check out the chart to the right for the (chemical) breakdown.

HARDWARE REFRESH OR REPLACE?

Subatomic Insight: See what tradeoffs IT pros consider when refreshing hardware vs. replacing.

http://community.spiceworks.com/topic/422240-what-do-you-consider-when-purchasing-new-vs-refreshing-existing-hardware


NEW VS. RECURRING HARDWARE IN 2014(Percentage of respondents)

New Recurring Don’t know

0 20 40 60 80 100

2%Desktop 31% 67%

5%Server 49% 46%

3%Laptop 30% 67%

3%Networking 51% 46%

3%Printers 28% 69%


04ATOMIC MASS:SOFTWARE

Another major component getting its fair share of IT budget love in 2014: software. And with Windows XP down to its last electron (Getting Over Your XP), it’s no surprise that OS purchases top

the list of upcoming software invest-ments. Other big focuses for 2014: Productivity software, virtualization and security all appear to be active within the tech budget nucleus in the coming year.

software

Sw2

50%

49%

36%

0 10 20 30 40 50 60

Productivity

Virtualization

Security

Database

OS 60%

60%

TOP 5 PLANNED SOFTWARE PURCHASES IN 2014 (Percentage of respondents)



The dollars line up closely with software that’ll be purchased: An average of 22% of software budgets will go to productivity, 21% to OSs, 15% to virtualization, and 13% to security software.

For the software that IT departments are slot-ting for purchase in 2014, the majority of spend will be toward upgrade and maintenance.

In terms of new spend, close to 40% will put dollars toward virtualization, and 30% will put new spend toward productivity. OSs and security tie for third, both anticipating 28% new spend in the coming year.

TOP 5 SOFTWARE INVESTMENTS (As a percentage of software budget)

0 5 10 15 20 25

21%

22%

15%

13%

10%

OS

Productivity

Virtualization

Security

Database

SOFTWARE UPGRADE VS. NEW IN 2014

0

20

40

60

80

100

Virtualization

39%

Productivity OS Security Database

30% 28% 28%

7%

61% 68% 70% 71% 91%2%1%2%2%0%

New Upgrade/maintenance Don’t know

NEW SOFTWARE OR AN UPGRADE?


05ATOMIC MASS:CLOUD

While hosted services aren’t at the top of the budgetary wish-list, up in the stratosphere with hardware and software, it still counts for an average of 14% of the IT budget. But, where should marketers of cloud-based solutions aim their efforts in the coming year?

The top services IT pros plan to purchase: Web hosting, followed by email hosting, online backup, and content filtering.

cloud

Cld3

Subatomic Insight: Find out what IT pros consider when purchasing web hosting solutions.

http://community.spiceworks.com/topic/422241-what-considerations-come-into-play-when-selecting-a-web-hosting-solution


How will cloud services budgets get spent in 2014? Here’s the IT pro forecast: An average of 15% of the cloud services budget will be spent on both online backup

and recovery and email hosting in 2014. Web and application hosting also rank high receiving an average of 12% and 11% of the cloud services budget, respectively.

TOP 6 PLANNED PURCHASES OF CLOUD SERVICES IN 2014 (Percentage of respondents)

TOP 6 CLOUD SERVICES INVESTMENTS (As a percentage of cloud services budget)

49%Web hosting

44%Email hosting

38%Online backup/

recovery

36%Content �ltering

26%Application

hosting

26%Productivity

solutions

Online backup/recovery

Emailhosting

Webhosting

Applicationhosting

Productivitysolutions

Content�ltering

0

10

20

30

40

50

9%11%12%15%15%8%


The answer: Recurring. The answer: Recurring. The answer… you get the idea. The majority of hosted services purchased will be, that’s right, recurring dollars. But what about new money? The service that will capture the most new dollars among the top areas IT pros plan to invest in: Productivity solutions and online backup and recovery.

CLOUD SERVICES NEW OR RECURRING?


NEW VS. RECURRING CLOUD SERVICES IN 2014 (Percentage of respondents)

0 20 40 60 80 100

32% 68% 0%

31% 69% 0%

81% 4%15%

83% 4%13%

93% 1%6%

Productivity solutions

Online backup/recovery

84% 0%16%

Content �ltering

Application hosting

Email hosting

Web hosting

New Recurring Don’t know

Subatomic Insight: Learn all about cloud service trends in a few previous Data Gone Spicy Reports: Catching up to the Cloud, The Cloudification of the Network and Look Ma, No Hardware.

http://www.spiceworks.com/marketing/resources/downloads/spiceworks_voice_of_it_cloud_report_061813.php

http://www.spiceworks.com/marketing/resources/downloads/spiceworks_voice_of_it_pertino_iaas_081313.php

http://itreports.spiceworks.com/reports/spiceworks_voice_of_it-cloud-IT-applications.pdf


06ATOMIC MASS:MANAGED SERVICES

Albeit a smaller atomic weight, managed services are getting their fair share of spend in 2014. The top projects getting the lion’s share of the cash? Connectivity/bandwidth, storage and backup, hosting, and IT services.

managed ser.

Ms4

Subatomic Insight: Check out what IT pros look for with an MSP.

TOP PLANNED PURCHASES OF MANAGED SERVICES IN 2014 (Percentage of respondents)

53%

0 10 20 30 40 50 60

Storage/backup/archiving

Hosting

IT service providers

Consulting

Connectivity/bandwidth

49%

47%

44%

40%

http://community.spiceworks.com/topic/422243-what-do-you-look-for-when-selecting-an-msp


Breaking up the particles, where exactly are those dollars heading? An average of 17% of the managed services budget will go to storage/backup/archiving, IT service providers will see an average of 16% of their budget, hosting is slated to get an average of 15% of the budget, and email/collaboration rounds out the managed services spend of the top five planned purchases with an average of 10% of the budget.

The majority of managed services spend will be recurring; although the areas that are more likely to get new dollars will be storage/backup, consulting and email/collaboration.

TOP 5 MANAGED SERVICES INVESTMENTS(Average percentage of managed services budget)

0 5 10 15 20

17%

16%

15%

14%

12%


IT service providers

Hosting


Consulting

0 20 40 60 80 100


10% 88% 2%


0%36% 64%

Hosting

2%84%14%

IT services (service providers)

3%88%9%

Consulting

1%32% 67%

NEW VS. RECURRING MANAGED SERVICES IN 2014


07IT PURCHASING,MAGNIFIED

A bit of peer insight can go a long way. It turns out IT pros are just like the rest of us when it comes to tech research and vendor consideration: They consult the masses using a variety of different resources.

From Google search to Spiceworks to ratings and reviews, the pros are using multiple resources as they make their tech purchasing decisions.

$

$

$

$$


TOP 5 RESOURCES USED WHEN CONSIDERING VENDORS

TOP 5 RESOURCES TO JUSTIFY A LARGE PURCHASE

0 20 40 60 80 100

67%

70%

79%

79%

81%

Ratings and reviews

Peer recommendations

Manufacturer/vendor website

Google search

Spiceworks

0 10 20 30 40 50

44%

43%

43%

42%

40%

Ratings and reviews


Case studies/ROI studies


Spiceworks

TOP 5 RESOURCES USED WHEN RESEARCHING A NEW PRODUCT

0 20 40 60 80 100

92%

88%

86%

84%

82%

Google search

Spiceworks


IT forums



08EVALUATING IT

Through careful observation, the Spice Lab was able to break down the tech mon-ey molecules and peer deep into the struc-ture of 2014 IT spending. The conclusion: IT pros in North America are major players in how 2014 IT budgets will get spent. And they’ve got a clear read on where those dollars are headed.

Whether IT pros are spending their (company’s) hard-earned cash on hardware purchases, shelling out some software bucks, or setting aside cloud coinage, our numbers give a clear read on how to direct your marketing efforts over the next 12 months. And when it comes to where IT pros look for a little extra guidance… our Spice Lab gadgets tell the tale.

In order to make it into the tech bud-get lab (and under our powerful lens), respondents had to have some level of involvement in developing and managing their company’s IT budget.

The majority of respondents in this study make recommendations on how to spend their company’s budget (72%) and are responsible for spending it (77%). In other words, they’re big players.

THE TECH SPECIMENS: REAL IT DECISION-MAKERS

$$$

$


36% 60% 44% 72% 77%

ROLE IN MANAGING YOUR COMPANY’S IT BUDGET

I spend the budget

I make recommendations how we spend our budget

I provide input in developing the the budget

I manage the budget

I create the budget

From asking the right questions to knocking out killer research to studying the variables, Spiceworks helps tech marketers break IT down. Like to see some of that 2014 IT spend? Check out Spiceworks, where IT goes to work – and where savvy tech marketers get the tools they need… to generate a positive charge from their IT buyers.

THE TECH MARKETING METHODOLOGY:

http://community.spiceworks.com/marketing/tech-marketing


You’ve just read Spiceworks’ version of data gone spicy: Our answer to hum-drum data. We tackle the tech issues of today... and what’s coming soon to a server room near you. And we deliver it all with more originality and spice than your typical run-of-the-mill reports.

Drawing from a user base of more than 4 million IT pros, it’s a glimpse into tech you can’t get anywhere else! Data in this report comes from a Spiceworks survey conducted with 450 IT pros (and Spiceworks users) across North America.

Details on the data

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INDUSTRY (Top 12 industries shown)

COMPANY SIZE

Less than 19 employees

20-99 employees

100-149 employees

150-249 employees

250-499 employees

500-999 employees

12%

36%

11%

6%5%

15%

1,000 or more employees

15%

Manufacturing

14% 8%12% 7%10%

6%

EducationHealthcare IT ServiceProvider

Non Pro�t

Finance Construction

4%

7%

4% 2%3%

Government

Consulting SoftwareEngineeringRetail

4%


“A Better But Still Subpar Global TechMarket in 2014 And 2015,” Forrester Research, January 2, 2014

SOURCES

Drew Sollberger, Demand Generation Manager, Spiceworks Kayle Milian, Web Program Manager, Spiceworks

PHOTO CREDITS


The contents in this report are a result of primary research performed by Spiceworks. Unless otherwise noted, the entire contents distributed as part of this report are copyrighted by Spiceworks. As such any information made available by any means in this report may not be copied, reproduced, duplicated, published, displayed, transmitted, distributed, given, sold, traded, resold, marketed, offered for sale, modified to create derivative works or otherwise exploited for valuable consideration without prior written consent by Spiceworks. For more information visit www.spiceworks.com/voice-of-it/terms.

This report contains information of fact relating to parties other than Spiceworks. Although the information have been obtained from, and are based on sources that Spiceworks believes to be reliable, Spiceworks does not guarantee the accuracy, and any such information might be incomplete or condensed. Any estimates included in this report constitute Spiceworks’ judgment as of the date of compilation, and are subject to change without notice. This report is for information purposes only. All responsibility for any interpretations or actions based on the information or commentary contained within this report lie solely with the recipient. All rights reserved. 2014.

About Spiceworks Voice of IT®

The Spiceworks Voice of IT market insights program publishes stats, trends and opinions collected from technology professionals that are among the more than 4 million users of Spiceworks. Survey panelists opt-in to answer questions on technology trends important to them. To find out more about our research capabilities, email [email protected].

About Spiceworks

Spiceworks, is the vertical network for IT that more than 4 million IT professionals use to connect with one another and over 2,700 technology brands. The company simplifies how IT professionals discover, buy and manage more than $500 billion in technology products and services each year. Headquartered in Austin, Texas, Spiceworks is backed by Adams Street Partners, Tenaya Capital, Institutional Venture Partners (IVP), Shasta Ventures and Austin Ventures. For more information visit www.spiceworks.com.

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Documents

Spiceworks It Budget Report 2014