Today Spiceworks Ziff Davis (SWZD) published its annual report, 2022 State of IT, providing insight into planned IT budget allocation and corporate revenue expectations, with a granular look at emerging technologies, adoption drivers, and anticipated challenges.
“Businesses expect corporate revenues and IT budgets to rise significantly in 2022, following cuts to spending on non-essential projects during the pandemic”
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To gain greater visibility into the tech landscape, SWZD surveyed 1,000+ IT buyers in companies across North America and Europe; unpacking how the shift to remote work during the pandemic triggered and will continue to foster profound changes in IT on a global scale.
2022 State of IT Report Highlights:
- As businesses contemplate a post-pandemic future, most expect business revenues to increase (61%) despite ongoing challenges.
- Representing a huge year-over-year (YoY) increase in tech spending, the majority of businesses expect IT budgets to either increase (53%) or stay the same (35%).
- However, fallout from the pandemic is expected to continue with shortages, price increases, shipping delays, and logistical issues.
- IT budgets will shift into cloud and managed services, and emerging tech adoption plans will accelerate to modernize infrastructure and better support and secure remote workers.
- One quarter of IT professionals are planning to look for or change jobs in 2022. Among these IT job seekers, 86% will consider remote roles.
“Businesses expect corporate revenues and IT budgets to rise significantly in 2022, following cuts to spending on non-essential projects during the pandemic,” said Peter Tsai, Head of Technology Insights, SWZD. “This renewed optimism is good news for the tech industry, as businesses plan to invest to prioritize new IT projects, facilitate digital transformation, and enable productivity in a hybrid working environment.”
Revenue and Tech Spend Growth Drivers in 2022
As organizations strategize for 2022, most are optimistic that revenue will come surging back from the significant YoY drop seen in 2021: 61% of organizations expect their corporate revenues to increase in 2022, with only 8% expecting a decrease.
This expectation will influence 32% of budget increases, but will not be the primary force driving digital transformation. Efforts catalyzed by the pandemic-driven rush to remote work will continue to significantly impact future tech spend as much of the workforce goes remote permanently, part or full-time. Multi-year modernization efforts are anticipated, indicated by an elevated priority on IT projects in many organizations — the top driver of budget increases (49%) in 2022, up from 45% in 2021.
SWZD asserts that 64% of enterprises (500+ employees) plan to raise IT budgets vs. 45% of small to mid-size businesses (1-499 employees).
Budget Allocation: Software, Hardware, and Cloud
SWZD’s survey sought to understand how technology budgets will be allocated across hardware, software, cloud services, and managed IT services; ultimately finding a continuation of remote work trends observed in prior years.
Although hardware will continue to account for the largest share of IT spending in 2022, as a percentage of total IT budgets, the category has seen a significant decline over two years (33% in 2020 to 30% in 2022). As organizations invest in supporting remote workers, laptops will be the top hardware spending area (19% of hardware budgets) in 2022, eclipsing desktop spend (14%), which has fallen significantly over the past two years. While server spending will represent 11% of hardware budgets, allocations have dropped significantly, from 14% in 2020, as workloads shift away from on-premises data centers.
The push to remote work accelerated IT budget shifts to hosted/cloud-based services. SWZD’s research on the cloud buying collective found 50% of all business workloads are expected to run in the cloud by 2023, up from 40% in 2021; budget for cloud-based technologies has increased significantly in tandem, accounting for 26% of IT spending in 2022, up from 22% in 2020. Software expenditures associated with on-premises servers are on the decline with these cloud migrations. As a percentage of total software budgets, planned spending fell significantly between 2020-2022 on virtualization (from 10% to 8%) and operating systems (from 13% to 11%).
Emerging Tech Adoption
To align with the fast-changing mandates and maintain productivity levels throughout the pandemic, organizations often prioritized immediate needs yielding quick return on investment (ROI) and otherwise curtailed tech spending in less pressing areas.
In 2022, organizations plan to return from hiatus with significant YoY jumps in plans to adopt many emerging technologies including IT automation, Gigabit Wi-Fi, AI, IoT devices, hyperconverged infrastructure, containers, and more. On the industry level, there are instances where certain verticals are ahead of the curve for specific technologies like 3D printing in education, blockchain in retail and financial services, IT automation in financial services, and gigabit Wi-Fi for IT services firms.
Emerging security technology is one area where adoption growth continued unabated, despite the pandemic spending hiatus. As businesses cut back in other areas, they prioritized spending on solutions to protect endpoint devices and remote users more effectively.
More than three quarters of organizations plan to adopt employee training and anti-ransomware solutions within the next two years. Additionally, hardware-based authentication and user behavior analytics tools have seen significant jumps in planned adoption rates.
Challenges
Despite the anticipated boom in emerging tech adoption and optimism around IT budget and company revenues, IT professionals don’t think we’re out of the woods with the pandemic. SWZD notes that roughly 40% of IT departments expect to deal with the following challenges in 2022: limited product availability, shipping delays or logistical problems, supply chain issues, increases in product costs, and chip shortages.
Secondary but still-important concerns will include supporting remote workers by provisioning them with hardware and software.
Methodology
The Spiceworks Ziff Davis survey was conducted in July 2021 and included 1,145 IT buyers from organizations across North America and Europe. Data was also collected in APAC and LATAM, which will be reported separately because it cannot be trended with previous waves.
For more information and a complete list of survey results, visit: https://swzd.com/resources/state-of-it/
About Spiceworks Ziff Davis
Spiceworks Ziff Davis (SWZD), a division of J2 Global, Inc. (JCOM), is a trusted global marketplace that connects technology buyers and sellers with the most actionable and precise intent data. We are uniquely positioned to offer tech brands unmatched visibility into accounts that are truly in-market, by leveraging our scale, quality, and diversity of intent data. With unparalleled access to the world’s most influential technology buyers through a combination of first-party (Community, Tools, Editorial) and third-party intent data, SWZD is a leader in intent-backed, intelligent, omnichannel marketing.
Contacts
Caryn Pratt
VP, Global Marketing
Spiceworks Ziff Davis
caryn.pratt@swzd.com
