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Beyond the Buzz: Actual Global IT Spending Trends

Oct 11, 2011
By

Pam Baker






“We are seeing some increase in capital spending on IT, but only some,” said John Longwell, VP of Research at Computer Economics. “Enterprises are still shying away from anything that is too disruptive or risky.”

CE's recent report, Technology Trends 2011/2012, details technology adoption rates and investment rates and correlates the two.  The findings, while not wholly unexpected, are a bit of a buzz-kill.

“Companies are beginning to migrate to Windows 7, but the desktop virtualization has paused,” he explained. “They are investing in mobile applications and software as a service, both of which are safe bets, but we are not seeing much movement toward using the cloud for infrastructure or platforms. That may require a more robust economy where companies are willing to take more risk or require more computing resources in a hurry.”


In short, we are still in a risk-averse environment, he said, ERP is the one area where companies continue to invest.

“They are not necessarily purchasing new systems, but they are making incremental improvements and deploying additional functionality,” Longwell explained. “ERP is a platform for many other applications, such as business intelligence and mobile applications. These are both areas where we’re seeing continued investment in an otherwise difficult economic environment.”

The chart below shows the relationship between adoption and investment of the technologies covered in the study.

 

Global IT spending by app

(Source: Technology Trends 2011/2012)

The horizontal axis labeled “Percentage with Technology in Place” represents the current adoption rate. The higher the adoption rate, the farther the technology moves to the right in the chart. The vertical axis is labeled “Percentage Currently Investing,” representing the current investment rate. The greater the percentage of organizations currently investing in a technology, the higher it rises on the chart. Note that the words “low” and “high” are relative to just the technologies in this study and do not indicate how those technologies perform against the broader market.

The technologies attracting the highest adoption rates and the most investment are ERP, business intelligence (BI), customer relationship management (CRM), and enterprise collaboration tools.

The technologies attracting the least amount of investment and the lowest adoption rates are desktop virtualization, tablet computers, infrastructure as a service (IaaS), environmental management solutions, and platform as a service (PaaS). Longwell notes that these technologies do still have potential but they are not a current priority for most IT shops.

Longwell was not surprised, he said, with most of his findings. But there were a couple places that raised an eyebrow.

“I had anticipated stronger growth in desktop virtualization. Last year, the study showed growing interest and investment in this technology,” he said. “This year, the interest is still there, but actual adoption levels are somewhat muted. At the same, the early adopters are reporting strong, positive economic experience, so we still believe the shift will come.

“Less surprising, but still significant, is the number of companies investing in developing enterprise mobile applications. The number of companies investing in mobile applications compared to the number that actually have them in place is quite astounding.”

A prolific and versatile writer, Pam Baker's published credits include numerous articles in leading publications including, but not limited to: Institutional Investor magazine, CIO.com, NetworkWorld, ComputerWorld, IT World, Linux World, Internet News, E-Commerce Times, LinuxInsider, CIO Today Magazine, NPTech News (nonprofits), MedTech Journal, I Six Sigma magazine, Computer Sweden, NY Times, and Knight-Ridder/McClatchy newspapers. She has also authored several analytical studies on technology and eight books. Baker also wrote and produced an award-winning documentary on paper-making. She is a member of the National Press Club (NPC), Society of Professional Journalists (SPJ), and the Internet Press Guild (IPG).


Tags: IT spending, CRM, ERP, Computer Economics, PaaS, Business Intelligence Systems, IaaS,
 

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