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Mobility and Web Apps Are High Priorities

IT budgets are on the rise, with mobility and web apps and aligning IT with business growth top priorities, according to ZDNet and TechRepublic's inaugural IT Priorities 2012 report.

The report found that more than twice as many organizations report increased IT budgets in 2011 as report budget decreases. Some 38.7 percent of organizations say their IT budgets have increased, while just 16.7 percent report lower budgets, and 44.6 percent say their budgets year- on-year were flat. More than 20 percent of organizations report budget increases of more than 10 percent.

The top three IT priorities are improving business process and efficiency (a “top priority” or “major priority” for 69.1% of businesses), aligning IT priorities with business growth (61.1%) and increasing overall productivity with new technologies (59.5%), according to ZDNet.

The larger the business, the more focused they are on lowering IT infrastructure costs. Government organizations are far more intent on cutting overall IT costs (70 percent) than others, the report found.

Mobility and Web apps are a high priority for many IT buyers. There will be a strong focus in 2012 and 2013 on projects to introduce mobile applications, but over the next year web applications have priority.

Heightened Demand for New Technology Projects

IT budgets are up, and so is demand for new technology projects, according to the 2012 edition of InformationWeek's annual Outlook survey. Fifty-six percent of respondents say their companies plan to increase tech spending in the coming year, up from 46 percent two years ago. Three-quarters of respondents see heightened demand for new IT projects, up from about half in our Outlook 2010 survey. This budget growth builds on last year's momentum, while strong demand for tech projects is a positive sign for overall business expansion and investment.

Two years ago, just 14 percent of companies were expanding compared with 18 percent making cuts. Today, 25 percent are expanding vs. just 9 percent cutting back. Nearly one-quarter say IT is viewed as a business driver and is therefore asked to cut spending less than other departments.

Nearly half of respondents say their companies will increase spending on data center software next year compared with just 9 percent cutting that spending; 42 percent say they will increase spending on data center hardware, while 12 percent will cut.

"Since 83 percent of respondents to our 2012 Outlook poll are management, either IT (70 percent) or corporate (13 percent), this survey gives a very clear picture of plans," says Lorna Garey, content director of InformationWeek Reports. "Areas covered in the report include what to expect in emerging tablet, enterprise social networking, data center, and big data technologies."

Tech Leaders Focus on Improving Productivity

Improving productivity was the highest business priority among technology decision-makers in Dataquest's annual survey of tech priorities. Sixty percent of respondents said improving productivity was a top priority, followed by 54 percent intent on reducing operational costs, and 48 percent focusing on improving customer service.

Dataquest noted that business priorities are focused toward internal improvements instead of more aggressive and outward-facing business priorities like rapid growth in business volumes and setting up new business units.

Forty-two percent of respondents forecast a slight increase in IT spending this year, while 22 percent expect a significant increase or status quo. Only 6 percent see IT spending declining this year.

Global IT Spending Higher Than Expected

Worldwide IT spending is on pace to grow 7.1 percent in 2011, according to the latest quarterly spending outlook by Gartner. Analysts have revised overall IT forecast spending growth in US dollar terms, up from their first quarter update, when they projected 5.6 percent growth for 2011.

Global IT services is forecast to reach $846 billion in 2011, a 6.6 percent increase from 2010. The computing and hardware segment is poised for the strongest growth with spending forecast to grow 11.7 percent in 2011.

The migration to public cloud services is currently one of the hottest topics in IT, and Gartner's latest forecast found that spending in this area is projected to grow four times faster than spending on overall IT. Worldwide public cloud services spending is forecast to total $89 billion in 2011, up from $74 billion in 2010. The market is forecast to reach $177 billion by 2015.

However, to put this growth in context, Gartner analysts said public cloud services spending was only about 2 percent of global IT spending in 2010, and by 2015 the level of spending on public cloud services will be less than 5 percent of the total spent on IT overall.

EMEA: More Money Needed for Innovation

Organizations across Europe, the Middle East, and Africa (EMEA) agree on the need to refocus IT budgets toward IT innovation in order to improve business performance, productivity, and profitability, according to a new study conducted by SAP. The study looked into IT spending priorities of nearly 500 senior IT decision-makers in eight countries across EMEA, and concluded that a key issue was the division of IT spend among three areas: operations, maintenance, and innovation.

One-third of companies said that their current IT strategy is too focused on "simply keeping the lights on" in the day-to-day running of existing IT systems. Overall, an alarming 60 percent of companies said that this IT strategy has held them back from investing in innovation. Respondents indicated that they face a wide range of issues that currently prevent them from investing in IT innovation.

The most commonly cited reason was uncertainty about the economy, with 48 percent of respondents believing this was a barrier. In addition, 39 percent stated that too much money is spent on operations at the moment, therefore leaving a deficit in the budget that could otherwise be directed toward IT innovation. The detrimental effect was also viewed as impacting competitiveness, with 38 percent of respondents stating the current spend priorities harmed their competitive position.

Lack of spend on IT innovation is having a negative business impact, with 44 percent of respondents saying it has directly resulted in lack of productivity. Forty-three percent also claim to have lost potential cost savings because of the spend deficit. Additionally, over half of the companies surveyed believe that they would get greater business value if more was spent on IT innovation.

When asked how this lack of IT innovation investment would impact their company over the next three years, one-third of respondents claimed that this would result in lower revenue growth than their business needed, and 38 percent also said it would result in a failure to meet regulation and compliance demands.

"Our research has confirmed that companies continue to spend more of their IT budgets on operations than on IT innovation," said Chris McClain, senior vice president of EMEA and India, SAP Premier Customer Network. "SAP is working with many customers around the world to help them lower their TCO to apply resources toward the innovation that will give them the advantages to grow their businesses and achieve their strategic goals."

The survey was comprised of 487 interviews with senior IT decision-makers including CIOs, IT budget decision-makers, and IT budget holders, conducted across eight countries (UK, Russia, Germany, UAE, France, Saudi, Italy, and Qatar). SAP is the world's leading provider of business software, offering applications and services that enable companies of all sizes and in more than 25 industries to become best-run businesses.

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