The IT Comeback: Why Global Spend On Information Technology is on the Rise

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Between 2010 and 2016 many journalists and leading analysts predicted the demise of traditional IT departments. The democratization of technology, shift from on-site data storage to cloud storage, and the BYOD (Bring Your Own Device) trend seemed poised to break apart the black box corporate IT department. However, while most employees can now problem solve basic hardware and software issues on their own, a recent NewtonX qual-quant-qual analysis of enterprise IT spend found that investment in IT departments has actually grown by 4.8% YoY on average.

The NewtonX survey covered 400 large enterprises, and retroactively tracked IT spend over the past ten years. The insights and data in this article are sourced from the results of the NewtonX survey.

A $3.8T Industry: The New Enterprise IT

Corporate IT budgets didn’t go away when employees started bringing their own laptops and cell phones into the office; rather, the spend shifted into cloud services, enterprise software, and SaaS. As a result, IT departments have actually risen through the corporate ranks and are now considered a critical aspect of business decision-making. Indeed, 32% of the enterprises that participated in the NewtonX survey reported the addition of a CIO, CISO, or VP-level information officer.

Ten years ago, IT departments maintained networks and infrastructure in house, made purchasing decisions for hardware, and maintained storage and servers. Now, IT departments oversee data protection and privacy policies, manage cloud services, manage budgets for SaaS and enterprise software services, and manage the analysis and transmittal of electronic information. These decisions affect the integrity of an organization, from its security to its daily operations. Because of this, choosing and managing IT has become a business-critical decision making process.

As boundaries between IT and business decision making blur, corporate IT departments will evolve into being not only the platform upon which businesses function, but also the drivers behind business growth.

Enterprises reported a significant downturn in spend on hardware, including phones and PCs — in part due to lower costs, but also in part due to a saturated market that doesn’t require continuous upgrades to remain relevant. Additionally, while on average enterprises devote 23% of their overall IT spend to on-site data storage systems, 83% of enterprises said that they expect spend on on-site storage to decrease in 2019.

What Enterprise Spend on IT Looks Like in 2019

The top three areas of spend in 2019 across enterprises will be:

  1. Cloud storage and computing services
  2. SaaS
  3. Enterprise application software

According to Gartner, global spending on IT is expected to reach $3.8T in 2019, up 3.2% from 2018. Interestingly, spend on IT personnel is also expected to increase this year, according to the NewtonX survey. Demand for senior-level IT people who are well-versed in data storage, analysis, and protection is at an all-time high, and many companies are scrambling to staff their information teams.

The results of this survey indicate a future for IT that’s a far cry from the dispersed employee responsibility for technology that many predicted ten years ago. The scope of the IT department may have changed, but its importance has only grown.

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