4 Notable IT Spending Trends and Tech Budget Considerations for 2021

Stacks of silver coins with investment graph lines superimposed over them to represent IT spending.Where would we be today without technology? While the pandemic has kept us apart, cloud computing, the Internet of Things (IoT) and other types of tech have made it possible for us to stay connected with colleagues and customers, facilitated medical treatment from a distance and more.

Subsequently, it’s no surprise that many organizations plan to invest more in IT this year despite the economic downturn caused by COVID-19. Worldwide IT spending is expected to reach $3.9 trillion in 2021, a 6.2 percent increase compared to 2020, according to a press release from Gartner. The increase will likely result from the continued need to accommodate remote workers, enable virtual learning and advance other digital transformation initiatives.

“CIOs have a balancing act to perform in 2021 — saving cash and expanding IT,” said John-David Lovelock, distinguished research vice president at Gartner, in the release.

If you’re wondering how your IT budget and expectations for spending in the next year or so compare to other organizations’ spending strategies, the Flexera 2021 State of Tech Spend Report offers insights based on a survey of 474 executives and high-level IT managers with in-depth knowledge of their companies’ tech budgets. Here are some notable findings from the report:

1. Approximately half of companies anticipate increasing their overall IT expenditures in 2021.

This aligns with Gartner’s forecast. The survey also found that the top three areas of focus for IT projects are digital transformation (with 56 percent of respondents identifying it as a leading priority), cybersecurity (50 percent), and cloud/cloud migration (48 percent).

2. Execs and IT managers expect to invest more in the cloud.

As companies continue to focus on remote work infrastructure and highly accessible solutions, it’s no surprise that many IT and business leaders plan to spend more on cloud computing this year. Here are some more key statistics on cloud expenditures from the report:

    • 42 percent of respondents say their organizations are more willing to migrate to the cloud because of the pandemic.
    • 49 percent have either slightly or significantly increased their public cloud spending as a result of COVID-19.
    • 57 percent have either slightly or significantly upped their spending on Software as a Service (SaaS) because of the pandemic.

3. Data center investments and server spending are on the decline.

As organizations across various industries rely more and more on cloud solutions, they’re also maintaining fewer servers and data centers: 35 percent of the professionals Flexera surveyed reported a slight or significant dip in spending on data centers as a result of the pandemic, and 32 percent said they’d spent slightly or significantly less on servers because of COVID-19.

This reflects what the Stratosphere Networks team has observed in our client base. A growing number of the companies we work with are transitioning to serverless computing and relying on the Microsoft Office 365 suite of business apps instead for storage and sharing. For details, check out this blog entry: “Reach New Heights in 2021 by Going Serverless and Focusing on Security.”

4. Microsoft is the top IT vendor.

Our clients aren’t the only ones turning to Microsoft solutions to empower remote workers, drive productivity and contain costs. Nearly half (47 percent) of the respondents to Flexera’s survey identified Microsoft as their largest vendor as measured by amount spent. Amazon Web Services (AWS) came in second, with 22 percent of respondents reporting it as their largest vendor by spend.

Overall, it’s impossible to say precisely what the next year or so has in store for the IT world. However, it’s clear that investing in new technology and digital transformation is vital for any company that doesn’t want to get left behind at a time when remote, digital and cloud-based life is the new norm.

If you’d like to learn more about the cloud, digital transformation and how to craft a strategic IT budget for your business, don’t hesitate to reach out to our team of technology advisors. We have extensive experience crafting strategic IT road maps for our clients and can help you align your tech plan with your organizational objectives. Just give us a call at 877-599-3999 or email sales@stratospherenetworks.com.

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