Channel Can Expect Increase in IT Spending, Says SWZD Report

There’s reason to be optimistic going into 2022 when it comes to IT spending. That’s according to Spiceworks Ziff Davis’ (SWZD) 2022 State of IT report.

The new report notes that in a post-pandemic future, most businesses (61%) expect revenues to increase despite ongoing challenges. This is reflected in their IT spending, with more than half (53%) expecting an increase in IT budgets.

There is good news for the channel. SWZD anticipates multiyear modernization efforts, indicated by an elevated priority on IT projects in many organizations. This is the top driver of budget increases (49%) in 2022, up from 45% in 2021.

Hardware will continue to account for the largest share of IT spending in 2022, as a percentage of total IT budgets. However, the category has seen a significant decline over two years (33% in 2020 to 30% in 2022). As organizations invest in supporting remote workers, laptops will be the top hardware spending area (19% of hardware budgets) in 2022. This is eclipsing desktop spend (14%), which has predictably fallen over the past two years.

While server spending will represent 11% of hardware budgets, allocations have dropped from 14% in 2020. This is due to workloads shifting away from on-premises data centers.

More Budget for Managed Services

Indeed, IT budgets will shift into cloud and managed services, says the research.

Spiceworks Ziff Davis’ Peter Tsai

“This is more prevalent in the enterprise,” said Peter Tsai, head of Technology Insights, SWZD. “There’s a big gap between the percentage of IT spending that will go towards managed services. Twenty-one percent of enterprise budgets will go there, compared to only 14% in SMEs.”

Tsai attributes that to enterprises having larger workforces, and more employees across different geographies to support.

SWZD’s research found one-half of all business workloads will run in the cloud by 2023. This is up from 40% in 2021. The budget for cloud-based technologies has increased significantly, accounting for 26% of IT spending in 2022. This is up from 22% in 2020.

Software expenditures associated with on-premises servers are on the decline with these cloud migrations. As a percentage of total software budgets, planned spending fell significantly between 2020-2022 on virtualization. It dropped from 10% to 8% and operating systems from 13% to 11%.

Emerging Tech Spending

In 2022, organizations plan to return from hiatus with plans to adopt many emerging technologies, says the report. This includes IT automation, Gigabit Wi-Fi, AI, IoT devices, hyperconverged infrastructure, containers and more.

Emerging security technology is one area where adoption growth continued unabated, despite the pandemic spending hiatus. As businesses cut back in other areas, they prioritized spending on solutions to protect endpoint devices and remote users more effectively.

More than three in four organizations plan to adopt employee training and anti-ransomware solutions within the next two years. Additionally, hardware-based authentication and user behavior analytics tools have seen significant jumps in planned adoption rates.

MSPs Hiring Additional Staff

Meanwhile, one-quarter of IT professionals are planning to look for or change jobs in 2022. Tsai said job hunters should look to the enterprise, as they plan to hire at a greater rate.

“Sixty-one percent of enterprises plan to grow the ranks of the IT staff, compared to only 30% of SMEs,” said Tsai.

This also applies to channel partners, he added.

“We asked a lot of people who work in the IT services industry, which includes MSPs. Fifty-nine percent of those IT services companies plan to hire additional IT staff during 2022. This indicates that they are a lot busier and have more business.”

However, fallout from the pandemic is expected to continue with shortages, price increases, shipping delays, and logistical issues.

Spiceworks is hosting its annual SpiceWorld event this week, virtually.