Good News for Channel: Tech Spending to Increase in 2023

Managed service providers (MSPs) have reason to be optimistic as tech spending remains strong going into 2023.

The Spiceworks Ziff Davis (SWZD) 2023 State of IT report explores IT budget plans and tech trends. Despite widespread recession fears, it shows tech spending in North America and Europe is on course to grow by 13% year-over-year (YoY).

Spiceworks’ Peter Tsai

Additionally, Peter Tsai, head of technology insights at SWZD, said businesses will “shift more of their budgets towards managed services.”

Firms will look to managed services to maintain and optimize technology stacks amid difficulties in hiring IT talent. “Expected spending on managed services will rise to 18% of total IT budgets in 2023, up from 15% before the pandemic,” he explained.

The largest share goes to managed business applications, managed security, managed hosting, and managed hardware support and maintenance.

“This shift is good news for MSPs,” said Tsai. “Especially those with offerings in high-growth areas such as managed security services.”

Firms with managed IT services budget increased from 8% in 2021 to an expected 11% in 2023. Budget for managed business applications grew from 9% in 2021 vs 11% in 2023.

While 83% of businesses are concerned about a recession in 2023, 51% plan to increase their overall IT budgets in 2023. This is compared to a narrow 6% that plan to reduce their tech spend.

The report highlights the need to update infrastructure and increased priority on IT projects as primary drivers for budget increases.

Click on the slideshow above to discover more findings on future B2B tech adoption and tech spending plans.