2020 IT Budgets Are Up, But ...

It's the classic opening that you don't want to hear from your plumber, a pest control service, or your dentist: "I have good news, and I have bad news. Which do you want first?" Come on, can't there just be good news?

Well, it's my turn to share the mixed news with the IT community. The good news is that IT budgets in 2020 are going up, with 44% of businesses reporting that their IT budgets are going up an average of 18%. I thought double-digit spending growth went out with mullets (if mullets ever really were "in"). Great news! But the bad news rests in a couple of the driving forces for the spending growth.

No, it's not that everyone is innovating and adding new data-driven products and services to their customer-facing portfolios. Some companies certainly are. However, one in four enterprise-level organizations tie their budget increases to the need for security investments because of a recent security incident. Not good. On the software side of the IT house, a driving force for spending is tied to replacing outdated software, most notably Windows 7 -- still a dominant OS in 79% of  companies -- and Windows Server 2008 R2, both of which are scheduled to come off support in January 2020. We've been milking those for 10 years, which means we've been playing with fire a bit, and it's time to scramble to catch up.

All of this happy/sad news comes from Spiceworks, a community focused on IT software, in its annual State of the IT: Industry Trends report. Spiceworks based its findings on a survey of 1,005 business technology buyers from North America and Europe.

Still, the uptick in spending may indicate that senior management recognizes the importance of technology and data within their organizations, and there's strong interest in companies of all sizes in today's emerging technologies. The Spiceworks report said:

"Most IT decision makers expect IT automation, AI technology, and IoT devices to have the biggest impact on their organization. In fact, over the last 12 months, IT decision makers have become more bullish on artificial intelligence: 32% believe AI will have the biggest impact on their organization, compared to 26% who said the same last year. This likely explains why adoption of AI-based technologies is expected to triple by 2021."

Looking at IT decision makers in large enterprises, with over 5,000 employees, researchers said those respondents are more likely to believe blockchain, edge computing, and 5G technology will have a major impact on their organizations.

So, while IT teams are still face challenges in keeping IT infrastructure up to date (50%), upgrading outdated software (46%), and following security best practices (39%), there are signs that IT is ready to take a leap forward with new concepts and technologies. That's definitely good news.