- Ken Lanzel
- December 14, 2023
- 0
Review of “State of IT 2024” Report from Spiceworks
The State of IT 2024 Report
The “State of IT 2024” report from Spiceworks provides a comprehensive overview of the current landscape of Information Technology. The report is shedding light on key trends, challenges, and opportunities. We delve into the report’s findings, examining crucial aspects such as IT spending, economic concerns, workforce challenges, and emerging technology adoption.
What is Spiceworks?
Are you an IT or Solution Engineering professional? You need to be part of the Spiceworks community!!! Spiceworks stands as a steadfast advocate for IT professionals and businesses navigating the complex landscape of information technology. Serving as a hub for millions of IT professionals, Spiceworks provides a collaborative platform where industry experts, tech vendors, and IT enthusiasts converge to share insights, solve challenges, and stay ahead of emerging trends.
With a commitment to fostering a vibrant community, Spiceworks empowers IT professionals with valuable resources, including reports like the “State of IT 2024,” offering deep insights into IT spending, workforce challenges, and emerging technology adoption. As an advocate, Spiceworks plays a pivotal role in shaping the future of IT by providing a supportive environment for knowledge exchange and collaboration, ultimately helping businesses thrive in the ever-evolving tech landscape.
IT Spending is Growing Amid Recession Worries
One of the standout revelations from the report is the resilience of IT spending despite widespread economic concerns. While 84% of businesses express worry about a potential recession, an impressive 66% of respondents plan to increase their IT budgets in 2024. This seemingly paradoxical decision suggests a strategic move by companies to propel new initiatives and modernize aging infrastructure, even in the face of economic uncertainties.
The report highlights that economic worries haven’t deterred plans to adopt emerging technologies. Within the next two years, organizations intend to double their use of edge computing, serverless computing, and artificial intelligence (AI). This forward-thinking approach indicates a commitment to technological evolution and a belief in the long-term benefits of investing in IT.
Investing Strategically in Transformation
The global economy has faced significant challenges in recent years, from the COVID-19 pandemic to labor shortages and inflation. Despite these obstacles, companies are strategically adding to their IT budgets, with 84% expressing concerns about a recession. This chapter dissects the decision-making process, emphasizing a pragmatic approach where businesses prioritize IT spending to drive transformation and overcome economic apprehensions.
The COVID-19 Pandemic is Still Creating Challenges
The lingering impacts of the COVID-19 pandemic continue to pose challenges for businesses. The report identifies ongoing issues such as increasing costs, IT skills or labor shortages, and supply chain disruptions. Despite these challenges, organizations are not only weathering the storm but are also gearing up for increased IT spending in 2024.
How Companies Are Cutting Costs
Cost-cutting measures are prevalent across companies of all sizes and industries. The report outlines various strategies employed by businesses, including changes to business processes, tech purchasing behaviors, and hiring practices. Notably, 87% of companies are contemplating switching tech vendors, indicating a potential shift in the tech landscape.
Yet Increasing Tech Budgets for 2024
Despite recent cost-cutting measures and ongoing challenges, the report provides reasons for optimism. The majority of companies plan to raise IT budgets, with 66% expecting an increase and only 4% planning a decrease. This positive outlook is reinforced by the fact that 73% of companies anticipate revenue growth in 2024, reflecting increased confidence compared to the previous year.
Factors Influencing State of IT Budget Growth
The top drivers for increased IT spending include the need to update infrastructure, an increased priority on IT projects, and heightened security concerns. Interestingly, compliance and regulation requirements are less influential, suggesting that companies have effectively navigated emerging privacy policies in recent years.
IT Budget Allocation: Detailed Spending Breakouts
The report introduces a revamped tech spending methodology aligned with the Technology Business Management (TBM) framework. This comprehensive approach covers not only traditional categories like hardware and software but also includes IT labor, facilities, telecommunications, and internal services. The breakdown reveals nuanced spending patterns across different company sizes, emphasizing distinct priorities.
Workplace Modernization is Driving Spending
The narrative of technology as a valuable investment rather than a mere cost is reinforced in this section. Despite economic uncertainties, businesses see technology as essential for modernizing the workplace, enhancing productivity, and gaining a competitive edge. Workplace modernization is identified as a key driver for increased tech budgets, aligning with Aberdeen research showing improved ROI for businesses that adopt new technologies.
Hiring for the State of IT is Hard, Even After Layoffs
The report delves into the challenges of hiring skilled IT talent, even with a larger pool of job seekers. While 41% of organizations plan to increase the size of internal IT staff, 63% still find it challenging to secure top IT talent. The section provides valuable insights for IT leaders, offering a five-step strategy to improve hiring in this competitive landscape.
Where Tech Teams are Thriving and Struggling
Tech team performance is evaluated, revealing high marks for core tasks like application uptime but challenges in managing costs and cultivating robust vendor relationships. This underscores the pressure on companies to optimize their investments effectively. The section highlights areas where tech teams excel and areas that present ongoing challenges.
Attributes of Top Performing IT Teams
Using the Best-in-Class methodology, the report identifies common attributes of top-performing IT teams. These teams are more likely to raise IT budgets, use and plan to adopt emerging technologies, expect increased revenues, track consumption of internal IT resources using a chargeback system, and actively take steps to operate more efficiently. Understanding these attributes provides valuable insights for organizations striving to enhance their IT performance.
Innovating for Tomorrow- State of IT
The final chapter explores trends in emerging technology adoption, emphasizing a commitment to technological evolution. Artificial Intelligence (AI) takes center stage as a transformative force, with more than half of businesses planning to adopt AI within the next two years. The report identifies key areas of continued investment in tech innovation and showcases a doubling of adoption for emerging technologies such as Kubernetes, edge computing, converged infrastructure, and serverless computing.
Conclusion- State of IT
The “State of IT 2024” report from Spiceworks provides a rich tapestry of insights into the current landscape of Information Technology. Despite economic uncertainties and ongoing challenges, businesses are strategically increasing IT budgets, embracing emerging technologies, and prioritizing workplace modernization. The report serves as a valuable resource for IT professionals, leaders, and tech vendors, offering a nuanced understanding of the trends that will shape the IT landscape in the coming year.
FAQs
- Q: Why are companies increasing IT budgets despite recession worries? A: Despite 84% fearing a recession, 66% strategically boost IT budgets for future initiatives and modernization.
- Q: How are businesses adapting spending in the face of challenges like the pandemic and labor shortages? A: Companies streamline operations—81% alter processes, 74% adjust tech purchases, and 43% slow hiring or lay off workers.
- Q: What drives increased IT spending, and how does it differ from compliance concerns? A: Key drivers include updating infrastructure, prioritizing IT projects, heightened security concerns, and inflation. Compliance has a lesser impact.
- Q: How do businesses plan to overcome challenges in hiring skilled IT talent? A: A five-step strategy advises proactive planning, investing in skills development, balancing remote work, emphasizing culture, and tailoring recruitment strategies.
- Q: What sets top-performing IT teams apart, and how can other organizations learn from them? A: Top teams raise budgets, adopt emerging tech, expect revenue growth, track internal resources, and actively enhance efficiency—key lessons for others.