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2018 Will See Business IT Budgets Rise Again: Spiceworks Study

After several years of flat IT budgets, business revenue and in turn IT budgets are expected to start turning the corner, says the report.

Business IT spending in 2018 will finally begin to increase again after several years of flat IT budgets, according to the latest 2018 State of IT report from professional business networking company, Spiceworks.

The survey, which includes responses from 1,003 IT professionals from businesses in North America and Europe, found that 44 percent of the respondents said they expect their company IT budgets to increase by an average of 19 percent in the coming year. Another 43 percent of the survey respondents said they expect their business IT budgets to remain unchanged from 2017, while another 11 percent reported they expect their budgets to be reduced.

Some 45 percent of the respondents said they expect their companies to add IT hires in 2018 as well, as they work to increase their adoptions of emerging technologies such as artificial intelligence, internet of things and virtual reality, according to the report. The latest Spiceworks study, which was conducted in July, was unveiled at the company's recent SpiceWorld 2017 user conference in Austin, Texas.

Most of that IT hiring is expected at larger companies, according to the report, with 62 percent of enterprises with 1,000 to 4,999 employees and 70 percent of companies with more than 5,000 employees reporting they'll hire more IT staffers in 2018.

The latest survey results show progress compared to the past three years when IT budgets remained largely unchanged due to flat business revenues, Peter Tsai, a senior technology analyst at Spiceworks, told ITPro.

"We can infer that people are getting a little more stable" with their budgets and projections due to apparent revenue and business growth, said Tsai. Much of that new spending will be used for replacing aging IT systems, including old hardware that is still running outdated and insecure operating systems such as Windows XP and Windows 2003 Server, he said. "There's a lot of legacy hardware that people know they have to get rid of for security reasons."

At the same time, emerging technologies will also take up more budget dollars inside many companies, according to the study. About 29 percent of the respondents said their companies have adopted IoT, while 18 percent have adopted VR and 13 percent have adopted AI to see how they can be used in their businesses. Those business adoption rates will expand significantly in the next 12 months to 48 percent for IoT, 32 percent for VR and 30 percent for AI, according to the survey.

About 55 percent of the respondents said they expect to increase their spending on cloud services in 2018 as those capabilities are used even more by businesses, the study reported. In 2017, cloud spending represents about 21 percent of the IT spending for the study's respondents, compared to 26 percent for software and 31 percent for hardware.

One area where increased IT spending is not being seen so far, according to most study respondents, is in meeting the consumer online privacy and security requirements of the upcoming General Data Protection Regulation, which will lay out strict rules for any company doing business in the European Union, starting in May of 2018.

Some 57 percent of the survey respondents reported that are not yet allocating any money to ensure compliance with the GDPR rules, which will assess significant penalties for non-compliance. The rules call for penalties up to four percent of a company's global revenue or $22.7 million for violations, such as not having sufficient customer consent to process their data and not notifying the supervising authority and users about a data breach within 72 hours. Personal data under the rules can consist of any information related to a person, including a name, a photo, an email address, bank details, posts on social networking websites, medical information, or a computer IP address.

"People are unprepared in large part" for the GDPR, said Tsai. "A lot of people in America might assume it's not pertinent to them, but that's wrong."

The Spiceworks study included respondents from companies of all sizes, from small businesses to large enterprises in industries such as manufacturing, healthcare, education, government and finance.

Spiceworks, which is often referred to as the "Facebook of IT," is an ad-supported platform for millions of IT pros to discuss their work and related technology issues.

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