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2011 IT Budget Building: 14 Areas To Watch

By Susan Nunziata and Guy Currier on 2010-07-29


As you plan your IT spending for 2011, it's worth a look at which budget areas saw the greatest increases in 2010 over the prior calendar year. This exclusive CIO Insight research shows that large enterprises and midrange enterprises differ widely on where they are spending IT dollars this year. There are also notable differences based on enterprise size when it comes to which IT categories have the greatest spending velocity. If you're weighing any IT purchases for 2011 (and we'll bet you are) you won't want to miss this report. This material is excerpted from CIO Insight's 2010 IT Investment Patterns study, designed and fielded by Ziff Davis Enterprise research. The survey, fielded in May 2010, received a total of 695 responses, 295 of which are from large enterprises with more than 500 employees, 173 from mid-sized companies with 50 to 499 employees and 127 from small businesses of less than 50 employees. (Note: responses from the small business segment are not included in this report). If you want to see which business apps are consuming the biggest chunk of budget pie, check out Budget-Busting Business Apps. If you're interested in where the security dollars are being spent, read 12 Security Budget Drainers. You can also view the complete
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5 Hot Spending Categories For Large Enterprises Budget areas with the greatest year-on-year increase, 2010 vs. 2009 (percent respondents) Virtualization software (42 percent) Servers (39 percent) Back-up hardware (34 percent) SANs (34 percent) Desktops/notebooks (31 percent)

5 Hot Spending Categories For Midrange Enterprises Budget areas with the greatest year-on-year increase, 2010 vs. 2009 (percent respondents) Servers (39 percent) Virtualization software (39 percent) Back-up hardware (35 percent) ERP apps (33 percent) SANs (32%)

Year-on-Year Expansions Large enterprises expanded these initiatives in 2010 (percent respondents) Infrastructure virtualization (46 percent) Infrastructure consolidation (46 percent) Green IT (36 percent) Unified Communications (32 percent) Service-oriented architecture (27 percent) Moving apps to SaaS (22 percent) App dev in the cloud / PaaS (20 percent)

Year-on-Year Expansions Midrange enterprises expanded these initiatives in 2010 (percent respondents) Infrastructure virtualization (34 percent) Infrastructure consolidation (34 percent) Green IT (20 percent) Moving apps to SaaS (17 percent) Unified communications (16 percent) App dev in the cloud / PaaS (15 percent)

Operating System Installations SIGNIFICANT deployments of operating systems are underway at these large enterprises in 2010 (percent respondents) Windows (65 percent) Mac OSX (13 percent) Linux (19 percent) Non-Linux Unix-Like (10 percent)

Operating System Installations For these large enterprises, most or all OS installations are UPGRADES in 2010 (percent respondents) Windows (59 percent) Mac OSX (22 percent) Linux (29 percent) Non-Linux Unix-Like (35 percent)

Operating System Installations SIGNIFICANT deployments of operating systems are underway at these midrange enterprises in 2010 (percent respondents) Windows (53 percent) Mac OSX (10 percent) Linux (20 percent) Non-Linux Unix-Like (6 percent)

Operating System Installations For these midrange enterprises, most or all OS installations are UPGRADES in 2010 (percent respondents) Windows (55 percent) Mac OSX (20 percent) Linux (30 percent) Non-Linux Unix-Like (30 percent)

Top 10 Large Enterprise Cost Overruns Budget versus actual spending, 2009 (percent over budget) Virtualization software (4.6 percent) Application platforms (2.6 percent) Firewalls/VPNs (2.5 percent) Collaboration apps (2.4 percent) ERP apps (2.3 percent) BI/data mining apps (2.3 percent) DBMs (2.2 percent) BPM/BPI apps (2.1percent) SFA/CRM apps (1.8 percent) Security management (1.7 percent)

Top 10 Midrange Enterprise Cost Overruns Budget Versus Actual Spending, 2009 (percent over budget) Data loss prevention (5.5 percent) Firewalls/VPNs (5.2 percent) Access control (4.5 percent) Backup hardware (4.3 percent) Authentication management (4.1 percent) E-mail/Web gateways (4.1 percent) Virtualization software (3.8 percent) Private clouds (3.7 percent) Security management (3.7 percent) Encryption (3.6 percent)

10 Most-Missed Budget Targets, 2009 Percentage of large enterprises that spent MORE than budgeted in the following categories: Servers – 36 percent Desktops/notebooks – 30 percent Technical training – 21 percent Virtualization software – 44 percent IT strategy consulting – 23 percent Systems integrators/outsourcing – 28 percent HR applications – 24 percent Printers – 14 percent BPM/BPI apps – 32 percent ERP apps – 30 percent

10 Most-Missed Budget Targets, 2009 Percentage of large enterprises that spent LESS than budgeted in the following categories: Servers – 23 percent Desktops/notebooks – 27 percent Technical training – 35 percent Virtualization software – 11 percent IT strategy consulting – 29 percent Systems integrators/outsourcing – 22 percent HR applications – 25 percent Printers – 35 percent BPM/BPI apps – 16 percent ERP apps – 18 percent

10 Most-Missed Budget Targets, 2009 Percentage of midrange enterprises that spent MORE than budgeted in the following categories: Servers – 35 percent Back-up hardware – 42 percent Wireless equipment – 27 percent Telecom equipment – 30 percent BI/Data mining apps – 31 percent SFA/CRM apps – 37 percent Voice/data services – 22 percent Technical training – 23 percent Network management – 28 percent E-commerce apps – 28 percent

10 Most-Missed Budget Targets, 2009 Percentage of midrange enterprises that spent LESS than budgeted in the following categories: Servers – 20 percent Back-up hardware – 11 percent Wireless equipment – 25 percent Telecom equipment – 11 percent BI/Data mining apps – 20 percent SFA/CRM apps – 13 percent Voice/data services – 27 percent Technical training – 26 percent Network management – 21 percent E-commerce apps – 20 percent

5 KEY TAKEAWAYS 1. When revenue is shrinking, larger companies AVOID CapEx risks, such as buying new hardware. 2. Midrange firms tend to see the BENEFITS of operational investments fairly quickly, even during economic downturn. 3. Computing, data center and storage hardware spending were frequently UNDERBUDGET in large organizations. 4. Conversely, computing, data center and storage hardware spending was OVERBUDGET in midrange enterprises. 5. Large enterprises did not overspend on SECURITY as much as their midrange counterparts did in 2009 and 2010.

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