WW Security Spending by Market Segment
Global Information Security Spending To Exceed $124B In 2019, Privacy Concerns Driving Demand
Gartner has identified key trends affecting information security spending in 2018-2019, including:
- At least 30% of organizations will spend on GDPR-related consulting and implementation services through 2019
- Risk management and privacy concerns within digital transformation initiatives will drive additional security service spending through 2020 for more than 40% of organizations.
- Services (subscription and managed) will represent at least 50% of security software delivery by 2020.
Top Security Priorities Next 12 Months
Factors That Determine Security Spending
The biggest drivers by far are best practices (73%) and compliance mandates (66%).
Both of these answers have often-debated drawbacks.
Thought leaders note that even well-established best practice frameworks from NIST and COBIT are limited and organizations can struggle to implement their directives in each unique context, and with the greatest possible effect.
Compliance as a driver of budget and priorities is perhaps even more problematic. Survey respondents listed compliance mandates as one of their biggest distractions from executing more strategic security plans.
Security Budget Allocation Next 12 Months
Security Technologies Being Actively Researched
A certain set of familiar security technologies have achieved wide adoption.
These technologies scored the highest level of in-use (either in production or being upgraded) among respondents – anti-virus/malware (83%), firewalls (82%), endpoint protection (76%), patch management (73%), and security education/awareness training (72%).
This year’s data finds that organizations are actively researching zero trust technologies (47%), deception technology (40%), behavior monitoring & analysis (39%), and cloud data protection (38%).
Last year’s results showed more interest around blockchain (58%), while this year only 50% of respondents are interested in the technology.
Security Executives Reporting Structure
Survey results show that more than two-thirds of responding organizations (69%) have a CSO, CISO or other designated top security leader.
Of those leaders, 31% report to the CIO, while 29% report to either the CEO or the Board of Directors.
Enterprise Tech Buying-Committees – Steps In B2B Tech Buying Process
B2B buyers are continuing to make key decisions earlier in the buying process.
42% of respondents spoke to and engaged with reps from the selected vendor in under a month, compared to 33% in 2018. Another 30% said they spoke to sales reps within one to three months.
70% of buyers accepted a call or demo from a vendor within the first three months, while another 70% evaluated which solutions would fit well with existing partners in the first three months.
35% sought input from peers and existing users within the first month of the purchase process
25% sought RFP/competitive bids and pricing info from a select list of vendors in under one month, compared to 19% in 2018
32% brought team members into the research process in the first month, compared to 25% in 2018
Enterprise Tech Buying Committees – Profiles of Vendors That Get Selected
The survey data shows that the sales rep continues to have a significant impact on the purchase decision throughout the entire customer journey.
When asked what the key differentiators were for the winning vendors, the majority (97%) said it was important that the sales rep could demonstrate a stronger knowledge of their needs — 66% considered this very important.
Also, 95% said it was important that the vendor’s sales team had more insights about their company and needs, with 55% considering this very important to their decision.
Other notable differentiators that are very important to B2B buyers include:
- Demonstrated a stronger knowledge of the solution area and the business landscape (65%)
- Provided informational content that was easy to consume (63%)
- Timeliness of a vendor’s response to inquiries (63%)
- Provided higher-quality content (61%)
Roughly 92% said that analyst reports and reviews influence their decisions, which is up from 82% in 2018. Of that group, 48% considered these reports very important.
How The B2B Purchase Processes Changed
The vast majority (83%) of senior-level B2B executives report that business needs and priorities have resulted in them either accelerating or postponing purchase decisions in the past year, according to Demand Gen Report’s 2019 B2B Buyers Survey Report .
B2B buyers are spending more time researching their purchases. Indeed, three-quarters (75%) of the more than 250 B2B executives surveyed agree that this is the case, while 73% say they now use more sources to research and evaluate purchases.
This is significant information for those on the marketing and sales side as it means there is a need to provide the relevant content which will aid buyers in making their purchasing decision.
Prior data shows that a great deal of the initial research on a solution is not performed by top decision-makers in the C-suite, so content should target more diverse roles.
Planned IT Budget Growth
55% of respondents state that their IT budget is expected to increase almost 9% over the next 12 months
32% of respondents state that their IT budget is expected to decrease over the next 12 months
7% of respondents state that their IT budget is expected to remain the same over the next 12 months
Planned IT Budget Spending
Department Budgets for Tech Purchases
The survey shows the greatest IT involvement in cloud computing investments, followed by communication/collaboration, mobility and the Internet of Things.
When it comes to data and analytics investments, some responsibility is being distributed to finance and accounting (35%), operations (32%), marketing (26%), administration (24%) and sales (22%).
Operations teams are most often involved when looking at communication and collaboration tools.
Engineering also has influence in artificial intelligence decisions, machine learning and Internet of Things investments.
Cost Savings From IT Efficiencies
Total Annual IT Budget: Enterprise Annual IT Budget $229M, SMB Annual ITBudget $17M
69% of respondents plan to purchase solutions to maintain the business / status quo tasks
91% of CIOs communicate that their role is becoming more digital and more innovation focused
Allocation of IT Cost Savings to Tech Purchases
45% of respondent organizations communicate that they are reinvesting IT cost savings to purchase new technologies to improve customer engagement / customer satisfaction
45% of respondent organizations communicate that they are reinvesting IT cost savings to purchase new or upgraded technologies to improve security
Security Budget Planned Spending
62% of respondent organizations are increasing the percentage of their IT budget dedicated to security solutions
41% of respondent organizations are increasing the percentage of their IT budget dedicated to risk analysis
Cost Savings From IT Efficiencies
16% of respondent organizations stated that IT efficiency measures produced a significant cost savings
63% of respondent organizations stated that IT efficiency measures produced a some cost savings
15% of respondent organizations stated that IT efficiency measures produced a no cost savings
Factors Causing IT Budgets to Shift
The following are the factors that caused a s shift in respondent’s IT budget during the last budget cycle
The factors below are expected to cause a shift int he next IT budget cycle as well
CIO Agenda: Rebalance Technology Portfolio Toward Digital Transformation
Redistribute investments between business-as-usual systems, which consume 71% of the budget, and the new, potentially disruptive technologies.
Build relationships with the business and other stakeholders while communicating the value of IT for digital business
CIOs Lead Digital Business Investments
- In the most successful digital-first businesses, the CIO the most visible, vocal, and successful in leading change management initiatives.
- Six of the nine core dimensions of a successful digital enablement strategy are dominated by CIOs.
- Technology Needs Assessment (48%), IT Skills Assessment (48%) and Change Management (33%) are the three areas CIOs are making the greatest contribution to digital-first strategies on the part of their businesses.
Primary Drivers of Revenue Growth for Enterprises
- 57% of enterprises (companies with over 1K employees) say improving new product and service offerings by digitally enabling operations is the single greatest source of revenue growth.
- Digitally enabling or streamlining new product and development processes and the systems supporting them also improve the ability to innovate and size new opportunities (49%).
- Once the new product development process is more digitally enabled, an organization will be able to more efficiently launch new capabilities (47% in enterprises) and improve sales capacity including up-sell and cross-sell (41% overall).
Primary Goals For Digital Business Investments
- Creating better customer experiences (67%), improving process efficiency through automation (53%), and driving new revenue (48%) are the top three digital business strategies enterprises are investing in today.
- Business Management, including General Managers with P&L responsibility, are placing a high priority on creating a better customer experience, far above all else.
Top Tech Initiatives Driving IT Investments for CIOs
While security/risk management ranked high on the list of tech initiatives that will drive IT investments, cited by 26% of this year’s survey respondents, it took a back seat to other areas, including data analytics, which dominated for 30% of responding organizations.
Cloud computing was cited by 27% of heads of IT and enterprise applications like ERP or CRM was a priority for 26%.
The top business initiatives on the docket this year were increasing operational efficiency and cybersecurity protections, both cited by 40% of CIOs, followed by customer experience (35%), growing the business (31%), and transforming existing business processes (31%).
CIOs Increase Focus IT Investments on Strategic Responsibilities
As part of the strategist mandate, CIOs are now actively involved in fostering new ideas for products and services, including functioning as a catalyst for business, not just technology, innovation.
Nearly a third (32%) of IT leaders in this year’s State of the CIO survey described their most pivotal role as helping the organization identify which parts of the business could be transformed through the use of digital technologies.
In comparison, slightly more than a quarter (26%) said IT’s primary contribution lies with identifying emerging technologies to aid in digital transformation, while 14% said IT’s expertise is suited for integrating new digital solutions into core enterprise systems.
Technology Purchases Reasons For New Tech Purchases
5G, AI, Machine learning to drive future digital business IT decision-makers are actively researching new technologies that will advance their digital business, including 5G, artificial intelligence and machine learning.
Some 20% of respondents say that their organization is piloting new initiatives for AI and ML, and 21% already have AI or ML in use.
5G research is under way as well, although it’s still not widely available yet in most of the world.
Still, 43% of ITDMs are researching 5G initiatives, 12% are piloting this and 11% have 5G in use.
About a quarter of IT decision makers report that their organization is already using IoT tools (26%), while 21% are piloting IoT initiatives.
One area that has not picked up a lot of steam is augmented reality virtual reality.
Some 42% of respondents say their organizations are not interested in this to become a digital business, primarily because they don’t see a need for it (78%).
Technology Purchases Reasons For New Tech Purchases
REASONS FOR NEW TECHNOLOGY PURCHASES
Executives involved in the purchase of major IT or security products revealed that organizations are rapidly transforming their infrastructure through the acquisition of new technologies. Thinking about their technology purchases throughout the past two years, IT decision-makers (ITDMs) stated that 37% were made as additions (not replacing existing technology), 32% were upgrades, and 31% were made as replacements of existing technologies
Technology Purchases Average Number of IT Influencers
The number of people involved in the average major enterprise technology purchase jumped to 21 this year, up more than 30% from 16 in 2017. However, this doesn’t mean IT’s influence is waning, since more than half of those people come from the IT side.
The largest teams are those involved in enterprise software, analytics, cloud and IT services decisions.
The smallest are the ones that buy web apps and desktops.
The average number of IT influencers is 21
– 11 from IT
– 10 from LOB
IT is the primary budget holder for 69% of tech purchases, and when making the short list, IT primarily researches and creates the short list (61%).
Overall, IT has budget responsibility for the vast majority of technology purchases: 86% for servers and storage, 80% for security and 76% for cloud computing and 71% for IT services
Technology Purchases Average Length of IT Purchase Process
A significant minority (42%) reported buying times of less than three months while companies that are far along the digital business transition process make decisions a month sooner than overall.
In fact, organizations that have no plans to adopt a digital business approach had the longest purchase cycle at 5.9 months.
SMBs (4.3 months) are considerably faster than enterprises (5.4 months) to make decisions.
This is most likely due to the smaller number of people involved in the process – 13 compared to 28.
Vendors that are expanding their market focus from enterprises to small businesses – or vice versa – should keep this dynamic in mind when seeking new customers.
Technology Purchases Content By Sales Stage
On average, ITDMs download five pieces of information during the research process with enterprises consuming more and SMBs less, probably because of the smaller companies’ shorter buying timeline.
An average of seven assets for enterprise SaaS, analytics and IoT devices but only four for more mature categories like web applications, servers/storage and telecom.
Buyers’ most relied-upon sources of content are independent technology content sites (cited by 53% of respondents), followed by white papers (48%) and in-person conversations with technology vendors (40%).
Technology Purchases Vendor Expectations Sales Call
What IT vendors can do to engage with them when researching for purchase, respondents stressed understanding the business need rather than focusing on the big sale, providing a proof of concept, trials/product demos, and responding quickly to questions or requests for information.
Technology Purchases Content
Technology Purchases Purchased From Existing Vendor
Forrester Tech Spending on Goods & Services
Forrester forecasts that growth in US business and government spending on tech goods, software, services, and staff will slow to 5.5%.
In terms of focus of tech spending, firms are prioritizing investments in business technologies (BT) that help them win, serve, and retain customers and thus grow revenues.
However, changes in front-office systems are starting to drive changes in back-office systems like finance, HR, purchasing, risk management, employee productivity, and core transaction systems.
So while spending on BT-focused software and consulting services will grow at 8% to 10% rates in 2018 and 2019, spending on back-office-focused software and services will grow nearly as rapidly, at 6% to 8% rates.
Gartner Worldwide IT Spending Forecast
Worldwide dollar-valued IT spending growth in 2018 has been revised by Gartner to 6.2%, up 1.8% from the prior quarter.
The constant-currency growth slightly declined to 3.0%.
Multinational technology product management leaders should hedge against further currency fluctuations in 2018.
Global IT Spending to Grow
Worldwide IT spending is projected to total $3.8Tin 2019, an increase of 3.2 percent from expected spending of $3.7 trillion in 2018, according to Gartner.
Enterprise software spending is forecast to experience the highest growth with an 8.3 percent increase in 2019.
Software as a service (SaaS) is driving growth in almost all software segments, particularly customer relationship management (CRM), due to increased focus on providing better customer experience.
Cloud software will grow at more than 22% this year compared with 6%growth for all other forms of software.
While core applications such as ERP, CRM and supply chain continue to get the lion share of dollars, security and privacy are of particular interest right now.
88% of CIO’s surveyed by Gartner said they have deployed or plan to deploy cybersecurity software and other technology in the next 12 months.
Worldwide IT Spending
Gartner’s latest worldwide IT spending forecast puts the total at $3.5T for this year (up 2.4% on 2016), rising to $3.6T in 2018 (up 3.5% on 2017)
The fastest-growing sectors are Enterprise Software (7.6% in 2017, 8.6% in 2018) followed by Devices in 2017 (3.8%) and IT Services in 2018 (4.7%)
Worldwide IT Spending Growth Rates
US Software Market By Category
In the $172B applications sector, business intelligence, collaboration and other/new enterprise process apps will grow fastest, according to Forrester
Consulting and systems integration services will follow this software growth, says Forrester
CIOs are bolstering internal staff and de-emphasizing outsourcing, except for cloud platforms
As far as hardware -servers, storage, PCs and peripherals — is concerned, Forrester foresees a small spending upturn in 2018
Capital Budget as a Percentage of IT Spending
IT capital spending (as a percentage of the total) continues to decline steadily
Virtualization, the cloud, and other technologies are lessening the need for capital expenditure growth even when times are good
While existing equipment must still be refreshed, the years of large capital expenditures in order to handle growth are likely gone, due to the elasticity and efficiencies of newer technologies
IT Spending Priorities By IT Initiative
Given the frequency and scale of security breaches and cyber-attacks, it’s no surprise to find ‘Security/privacy’ heading up Computer Economics’ spending priority ranking (as it did in 2016, and no doubt will in 2018)
Cloud applications come a close second after Security/privacy, followed by Cloud infrastructure. When it comes to new spending, the survey finds Business applications in clear first place (54%), followed by Networking (32%), IT personnel (29%), End-user technology (17%) and Data center (9%)
IT Spending Controlled Outside of IT
Shadow IT, where IT spend is controlled by influencers outside the IT department, is — like skills shortages — increasingly a fact of life for CIOs.
Four in ten IT leaders now report that more than 10 percent of the IT budget is outside their control
Technology Purchases – Drivers for 2019 IT Software Budget Increases
Many businesses are increasing IT budgets to replace outdated infrastructure, address the new reality in cybersecurity, and support digital transformation initiatives.
For large enterprises in particular, the movement to cloud-based infrastructure will help drop expenditures in total cost of operations.
Technology Purchases – 2019 IT Software Budget Allocations
The allocation of 2019 IT software budgets for software and remains steady year over year at 26% and 21% respectively.
However, as a percentage of total spend, hardware budget allocations get smaller as company sizes increase and managed service budget allocations get larger.
For enterprises in N.A with more than 5,000 employees, component of the IT budget exceeds 10%.
Technology Purchases – 2019 IT Hardware Budget Allocations
The top components of 2019 IT Hardware Budgets are: desktops, laptops, servers, and power and climate hardware top the list – desktop investments are still a cornerstone in many organizations, particularly in smaller companies.
Desktops are the primary computing device in 68% of organizations, compared to only 29% of organizations using laptops and 1% using tablets as the primary device for employees.
Technology Purchases – Drivers for IT Budget Increases
For enterprises with more than 5,000 employees, the drivers for IT budget increases were: increased security concerns, increased priority on IT projects and the need to upgrade outdated IT infrastructure.
For SMBs with 100 – 499 employees, the drivers for IT budget increases were: the need to upgrade outdated IT infrastructure, increased priority on IT projects and increased security concern.
European businesses were more likely to increase IT budgets due to changes in regulations, such as GDPR, and due to currency fluctuations.
Technology Purchases – Key Drivers for Hardware, Software & Services
The smallest companies are more driven to purchase new tech due to end of life (62%), business growth (57%), and end user needs (55%).
Enterprises with 5,000+ employees said new technology features are the primary driver enticing them to purchase new tech, perhaps because larger organizations, who are more likely to grow their IT budgets in 2019, can afford to stay current on the latest tech.
LOB Titles Involved in Technology Purchases
In smaller companies, the CEO/president is more likely to be involved.
In large enterprises with 5,000+ employees, business line managers are more likely to be involved.
When comparing regions, it’s evident BDMs in North American organizations are less likely to be involved in technology purchase decisions than their European counterparts.
Role of IT in Technology Purchases
ITDMs are nearly 2X as likely to be the sole decision maker for most technology categories.
In small businesses, ITDMs are nearly X as likely to be the sole decision maker
Overall, IT decision makers are most likely to hold the keys to the purchasing vault when it comes to networking devices, servers, computing devices, and backup/recovery solutions.
Role of LOB in Technology Purchases
Business Decision Makers are more likely to either sign off on final approval or veto the deal after ITDMs have made their vendor selection.
Business Decision Makers are typically involved in technology purchases when it comes to networking devices, servers, virtualization, backup/recovery, and power and climate technology.
Business Decision Makers are more likely to be involved in the purchase decisions for business support apps and industry-specific apps.
Technology Budget Growth – Enterprises, SMBs
61% of enterprises are increasing their technology budget
53% of SMBs are increasing their technology budget
9% of enterprises and SMBs are decreasing their technology budget
Expected Increases in Cybersecurity & Cloud Spending
Cybersecurity to increase 72%
Cloud Computing to increase 67%
Business Process Management to increase 63%
Customer Experience TEch to increase 50%
Deloitte – CMO Marketing Benchmarks – Knowledge Investments
Digital Business Transformation Survey Results – Technologies Implemented
More than a third of organizations (37%) have already started integrating and executing a digital-first approach
7% say they’re already an enterprise-wide digital business
45% of IT and business leaders surveyed say their companies are in the very early stages of becoming a digital business – either gathering information or just beginning to formulate a digital-first strategy.
28% of organizations are in the development stages of creating strategies, evaluating technology and the organizational changes that will be required for a digital transformation
17% of organizations are still gathering information before they develop a strategy
21% of organizations will spend $1 m-$10M on digital business initiatives
15% oof organizations plan to spend $10M or more on digital business projects in the next 12 months
21% of organizations plan to spend less than $1M this year on digital business initiatives
The overall expected average spend on digital business initiatives is $14.3M
Enterprise organizations (1,000+ employees) are expect to spend $27.5M
SMBs (<1,000 employees) are expected to spend $1.8M
Digital Business Transformation Survey Results – Technologies Planned to be Implemented
Cloud Computing Budgets & Spending for Enterprises & SMBs
Average Cloud Computing Budget: $2.2M
Average Cloud Computing Budget Enterprise: $2.2M
Average Cloud Computing Budget SMB: $2.2M
Average Cloud Computing Budget in 2016 was $1.6M
As companies increase their cloud computing adoption, they’re also increasing their cloud computing budgets
The average cloud computing budget, $1.6M in 2016, has spiked nearly 36% to $2.2M in 2018
Much of this increase is driven by SMBs (organizations with <1,000 employees), whose average cloud spend has more than doubled since 2016 to $889K
By comparison, enterprise organizations (1,000+ employees) average cloud spend has risen just 15% to $3.5M
Across companies of all sizes, the average cloud budget is spent roughly 48% on SaaS, 30% on IaaS, and 21% on PaaS
SaaS Spending Plans
Sales & Marketing are the top two spending priorities in SaaS
Companies are continuing to invest in front-office applications to drive customer-facing digital transformation initiatives
Technology C-level execs are most increasing their spending this year on Marketing, Service and Sales-related SaaS projects (all of which are in included in the CRM category of the survey).
CRM is far and away leading all budget growth priorities in 2018
Technology C-level execs continue to place a high priority for innovation on front-office applications, particularly Sales & Marketing, with the goal of digitally transforming their businesses to sharpen the focus on top-line revenue growth strategies and plans
Kleiner Perkins – Internet Trends – Mary Meeker – IT Spending Priorities
The IT projects that are expected to see the largest increases in IT spending are:
- Networking Equipment
- Artificial Intelligence (AI
- Hyper-converged Infrastructure
Gartner’s Worldwide IT Spending Forecast 2018
- Gartner’s Worldwide IT spending is projected to total $3.7T in 2018, 4% growth year over year)
- Enterprise software and IT services are expected to show strong growth – communications services to drive the majority of spending
- Software spending is expected to increase 8.5% in 2017 and then grow 9.4% in 2018 to total $387B
- IT services spending is on pace to increase 4% in 2017 to total $931B an increase of 5.3% in 2018 which is $980B
- The devices segment is expected to exhibit growth for the first time in two years with an increase of 5.3% in 2017 and then grow 5% in 2018
IDG – CIO Tech Poll – Tech Priorities
How is the purchase process evolving with the adoption of new technology?
Understand the digital priorities customers to provide the right educational assets throughout the sales cycle.
Digital transformation is putting more emphasis on the role of technology in driving business forward
- Digital business adoption
- Relevant and educational resources
- What’s driving IT Strategy
- Net New Products being introduced
IDG – CIO Tech Poll – Tech Priorities
What factors help elevate relationships with IT decision-makers?
How can the right content establish thought leadership?
Incumbent vendors don’t necessarily have an advantage
The IT decision maker purchase process
New merging vendors
IDG – CIO Tech Poll – Tech Priorities
Is your sales team aware of your customers’ preferences?
What do IT Decision Makers say?
What happens after relevant content is found by ITDMs?
Challenges to locate quality, trusted information
Factors that increase trust in online content
Register to receive info?
IDG – CIO Tech Poll – Tech Priorities
Do you have the proper marketing strategy in place to engage digital-focused buyers?
Are ITDMs hesitant to download content
What ITDMs value from vendors / sales reps
Follow-up: timing and channel
IDG – CIO Tech Poll – Tech Priorities
- 50% of tech leaders anticipate budget increases in 2018 – which increases to 57% for enterprises (1,000+ employees)
- IT leaders anticipate the greatest increase in budget allocation to be in predictive analytics (47%), business continuity/disaster recovery (47%), public cloud (46%) and hybrid cloud (45%).
- Organizations are considering new vendors – tech leaders report that 15% of tech spending will be spent with new tech companies this year
- Tech leaders shared that business continuity/disaster recovery is the most important project their IT team is currently working on
Data/analytics, cloud and Internet of Things are expected to have the greatest organizational impact over the next 3 – 5 years
Desired B2B Outcomes for Tech Projects
Accelerating Business Process and Agility
Optimize Existing Investments
View IT Technology Forecast Details – Spending, Staffing & Technology >>
Desired B2B Outcomes for Tech Projects
IDG CIO Tech Poll – Technology Adoption Curves
Technology leaders are spending more time and budget with emerging tech vendors — 20% of overall tech spending will be with new tech companies.
Organizations are most likely to use a new vendor on projects related to:
- Data & analytics 57%
- IoT 43%
- Cloud computing 43%
- Mobile (38%)
IT teams are participating in pilots and product testing to evaluate these new vendors.
New vendors are held to a higher level of scrutiny on associated security risk than tenured vendors.
Computerworld Forecast Study – Tech Spending
- At least 50% of respondents say they expect their spending on that technology to remain the same.
- A small but significant percentage of SMBs are planning to invest for the first time in several new areas: data analytics, data management, and IoT/M2M/telematics.
- Enterprises are significantly more likely than SMBs to plan to boost their spending in almost every category of technology, from mobile applications to unified communications.
- Enterprises plan to cut spending on on-premise software and, correspondingly, to increase spending on SaaS, Infrastructure as a Service, Platform as a Service, private cloud, and public cloud.
Go to Market Research – Gartner Global IT Spending Forecast
- Gartner reports that Global IT Spending is projected to reach nearly $3.5T in 2017, a 2.7% increase.
- Cloud computing with emerging digital technologies like AI (artificial intelligence) and blockchain are expected to drive growth.
- Competition in the public cloud sector is forecast to drive global server sales to a 5.6% annual growth rate in 2017.
- Gartner revised its global server forecast upward by 3% over the previous quarter based on strong global server sales
- Gartner predicts that data center spending would increase by about 2.6% this year after a 0.6% in 2016.
- Gartner expects enterprise software spending would reach $355B in 2017, a 6.8% growth rate.
Go to Market Charts Marketing – Cloud Computing Spending
Go to Market Charts Marketing – Technology Purchases Process
- IT Collaborates within their organization on technology purchases
- IT collaborates with LOB on IT purchases and that can be upstream in the IT decision making process or downstream in the process (and that can result in a delay or a veto of an technology purchase).
- Also, the number of individuals involved in a technology person varies.
- Cost and organizational zip are two primary factors that typically increase the size of the technology purchase team.
GTM – Why B2B IT Decision Makers Engage With Content and Salespeople
- The vast majority of It decision makers responded to an IDG survey stating that the number one reason that they are motivated to reach out to a salesperson is when valuable content or information is communicated or shared.
- However, saying the right thing or sharing the right content is not enough. IT decision makers will only stay engage if the salesperson can convincing demonstrate that they know, understand and have insights into the business/specific challenges the IT decision maker is facing.
- It should go without saying that most IT decision makers have been to a few rodeos and that sales rep’s must demonstrate honesty and transparency, in order to develop a bond.
Go to Market Charts Marketing – IaaS Software Spending
Public cloud IaaS hardware and software spending from 2015 to 2026
- The graphic from statista shows the level of spending ( $38B in 2016) on global public cloud infrastructure (both hardware and software).
- In 2016, spending on public cloud Infrastructure as a Service hardware and software is forecast to reach 38B globally.
- Amazon is the market share leader with 27% of the market through the first half of 2015.
- Infrastructure as a Service currently represents almost one-third of the overall cloud computing market.
- The IaaS market share leaders are Amazon with its Web Services (AWS) offering; Microsoft, with Azure; Google, via its Compute Engine; and IBM with its SmartCloud Enterprise.
Computerworld Forecast Study – Tech Spending
Go to Market IT Spending Research – Technology Purchases – IT Controls the Short List
- What is your organization’s process for creating a vendor shortlist?
- Once the initial short list is created, is it typical that additional vendors will be added to the short list of vendors to be evaluated?
Go to Market IT Spending Research – Gartner Predicts IT Spending to Hit $3.5T in 2017
- Revenue growth in software and IT services revenue is expected to drive the worldwide IT spending is forecast t0 $3.5T in 2017.
- 2017 IT spending is forecast to be a 2.9% gain over 2016, according to Gartner.
- Software and IT services are to be the growth segments.
- Software spending is projected to grow 6% in 2016, 7.2% in 2017 ( $357B).
- IT services spending is on pace to grow 3.9% in 2016 ($900B), a 4.8% gain in 2017 ($943B)
Go to Market IT Spending Research – Gartner Worldwide IT Spending Breakdown & Forecast
- The Gartner Worldwide IT Spending Breakdown & Forecast for Q3’16 was released by Gartner.
- IT spending includes devices, IT services, data center systems, enterprise software and telecom services markets across all geographies.
- Communications spend is the still the largest spend line item, followed by IT services devices , software and then data center systems – the top two line items represent over 505 of IT spend while the top 3 account for over 75% of IT spend.
- Gartner’s global forecast for IT spending growth in 2016 has been revised slightly to show a decline of negative 0.3%.
Go to Market IT Spending Research -Technology Purchase Process – Authorizers, Decision Makers, Recommenders and Influencers
- There are typically several steps that comprise the customer buying process that can span two or three quarters.
- Also, there are usually more than one functional group involved in the technology purchase process (IT and LOB are usual suspects). However, there is a strategic and an operational viewpoint for each functional group.
- Finally, the “lead” in the purchase process varies by stage in the buying process – by functional group and by audience type (strategic or operational.
Go to Market IT Spending Research – Gartner Says Worldwide IT Spending Is Forecast to Be Flat in 2016
According to Gartner’s Worldwide IT Spending Forecast, the $3.4T in IT spending is to be flat in 2016 which is actually is up from the negative 0.5 percent growth last quarter. However, the change in the forecast not to a fundamental change in demand but due to currency fluctuations.
Go to Market IT Spending Research – How Much is Spent on IT Data Center
Spending on Data center systems is forecast to be $174B in 2016, a 2% increase from 2015. The market is believed to be driven by strong growth in the server markets in Greater China and Western Europe and a strong refresh cycle is anticipated in the US enterprise network equipment market.
Go to Market IT Spending Research – How Much is Spent on Enterprise Software
Enterprise software spending is on course to reach one-third of a trillion or $332B – up 5.8% from 2015. The US is driving that growth as it contributed almost half of the incremental gain ($11.6B of the $24B increase) from 2015 to 2016–customer relationship management (CRM) is the fastest growing segment.
Go to Market IT Spending Research – How Much is Spent on Devices
Devices (including desktop, laptop, smartphones, tablets, etc) spending in 2016 is forecast to total $627B. Demand in Russia, Japan and Brazil are stifling the global PC recovery.
Go to Market IT Spending Research – How Much is Spent on IT Services
Spending in the IT services market is forecast to rise 3.7% to total $898B. The fastest growing region for IT services spending is Japan at 8.9% growth. Japanese based companies are beginning to comprehend that they need consulting support and advice to transform their business- value is perceived and more importantly, there is a willingness to pay for the services.
Go to Market IT Spending Research – How Much is Spent on Communications
Communications services spending is forecast to total $1.4T in 2016. While a staggering figure, this total is down 1.4% from 2015. Japan grew at 8.3% but China spent the most– $8.3B. Eastern Europe, Western Europe and North America all are forecast to decrease service spending as price wars and declining usage affect most communications services markets.
Go to Market IT Spending Research – Priorities
- ZDNETs IT budgets 2016: Surveys, software and services is a key piece of go to market IT spending research.
- The survey shows IT budgets and headcounts remaining largely flat.
- CIOs are faced with the problem of figuring out how to keep the business running while pursuing innovative projects on last year’s budget.
- IT budget priorities for 2106 shows a clear focus on operational efficiency, security and business continuity.
- Other areas of priority include mobile device management, plus the simplification and automation of many internal IT processes.
GTM Strategy – Customer Buying Process Includes IT & LOB
- Many organizations have an IT liaison function and it may report to IT, LOB or both – the solid and dotted line reporting varies.
Go to Market IT Spending Research – Gartner’s IT Spending Forecast
Gartner forecast for IT Spending Across Vertical Industries to Decline 3.5% in 2015 – all industries to decline.
Worldwide IT spending across vertical industries is forecast to total $2.7T in 2015 or a 3.5% decrease from 2014.
Go to Market IT Spending Retail
- Technologies that help understand customers better, improve engagement through multichannel experience and facilitate the buying process are high-priority areas.
- Building IT infrastructure to accept various mobile payment systems and digital wallets are also expected to be a high priority.
Go to Market IT Spending Banking & Securities
- Gartner expects banks in developed markets to 2X their IT budgets to support digital and other new technology initiatives through 2019
- Legacy maintenance is expected to decline.
- Investment in data solutions, driven by availability of big data, analytics tools and competition from financial technology companies is expected.
- Cybersecurity remains an area of focus in consumer banking segments, while an emerging area of interest is smart machine technology, including artificial intelligence, robotic process automation, intelligent analytics and deep learning.
Go to Market IT Spending Healthcare
- The U.S. accounts for 40% of all spending and is the largest healthcare IT market globally
- Investments in healthcare IT, driven mainly by the government’s Health Information Technology for Economic and Clinical Health (HITECH) Act provides financial incentives for hospitals and physicians to invest in IT, including electronic health records and other health information management systems.
- Gartner expects healthcare institutions to increase their spending on telehealth technologies by more than 15% annually, although starting from a very low base.
Go to Market IT Spending Research -Technology Decisions – The Role of Tech
The 2015 IDG Enterprise Role & Influence of the Technology Decision-Maker survey was fielded to gain insight into the evolving role and influence of IT decision-makers. Based on over 1200 respondents, the survey results provides detail into the various types of IT organizations and how they differ, examines strategic partnerships and drills down into the emerging technologies in the purchase process.
Technology Decisions – The Role of Tech – Key Findings
- 50% of enterprises currently have a federated IT structure
- 42% use enterprises use a centralized model
- 8% are decentralized
- Both executive IT and IT management are highly involved in the collaboration with LOB on projects or technical needs
- On average, IT decision-makers collaborate with 3.4 functions/titles –3.9 for enterprises versus 3.1 for SMB
- The CTO/IT architect/engineer is showing greater involvement in the middle of the IT purchase process and is less involved in determining the business need and approval/authorization
- Emerging technology vendors are primarily found through research (67% of the time), discussions with peers (61%) and attending physical events (57%)
- Technology vendors must be focused on customer service/response time, the ability to understand business goals and objectives, post-sales support and services, and demonstrate the long-term viability of their company in order to become a valued strategic partner
- Peers remain the most powerful source for technology information
Go to Market IT Spending Research -IT Spending by Vertical
- Gartner calculated IT spending as a percent of revenue, by industry.
- These percentages are relatively slow to change so even though it is 2014 data it is still useful.
- Garter provides estimates of the percentage of revenue that each industry spends on IT spending. It’s important to note that IT spending spans hardware, software, people, services and telecommunications.
- Typically, a fraction of IT spend usually a reasonable estimate of what a customer may spend with any vendor – excluding the IBMs, HPs, Accenture’s, Deloitte’s, etc.
Go to Market IT Spending Research
This is Forrester’s look Global IT spending which was $2T and that includes software, hardware, and IT services by enterprises and governments in 2013.
Even though the data is 2103, a key got to market planning point is the composition of spending. So, assuming that your company will capture a fixed percent of IT spend is not accurate if you are a software vendor. The calculation should be a percentage of the software segment of IT spend.
The primary components of IT spending are:
- IT Outsourcing
- Computer Equipment
- IT Consulting
- Communication Equipment