If you want to understand how tech is changing, you need to follow the money

There are some pretty clear signs of the shape of things to come - if you look at where the investment is going right now.
Written by Steve Ranger, Global News Director

It's always been hard to work out where the money goes in tech, where the countless billions spent on technology actually go, where it actually ends up.

Part of that is because IT spending is often literally hidden away. Once upon a time it used to be hidden away in the form of the servers in the mysterious basement or in the data centre that few of us would ever visit.

Companies are less likely to hold onto their own tech hardware now, but the IT spend is still hidden away. Much of it is spent on cloud computing, which really means it's instead hidden away in other people's data centres which even fewer of us will ever visit.

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For all this, most execs have come to understand the power and importance of technology in the past 18 months. That's because it played a big role in making it possible for the vast majority of office-based staff to rapidly switch to working from home, and it also helped organisations rethink their business processes or even business models so that they could continue to operate during the pandemic.

And it looks like that new understanding from execs is translating into bigger tech spending, as detailed in ZDNet's latest deep dive into IT budgets for 2022.

An enormous $4.4 trillion is going to be spent on tech next year, up 8.6% on this year according to tech analyst Gartner, as a new 'build' phase begins for many organisations that are looking to further their digital transformation plans.

So where is the money going? Cloud computing will be another big winner again, both in terms of applications (software as a service) and cloud infrastructure. Data analytics is something that CIOs say they plan to spend a lot on, although this has been a consistent priority over the last few years. After all, there's no point gathering up all that information about your customers if you can't turn it into useful data.

Beyond this, expect big increases in spending on IT security, assuming the CISO can persuade the board.

But forget about hardware and software. What about the human element? Will all this new-found enthusiasm for tech lead to better employment prospects and more money for tech professionals?

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Here the outlook is less clear. Automation and particularly the rise of cloud computing means that IT staff head counts have not especially increased significantly over the past decade. So the suggestion that many organisations are intending to increase the size of the IT organisation is a reflection of an economic bounce ahead.

That might push up wages, and at the very least will give developers a better negotiating position when it comes to things like working from home. 

So while it might still be hard for CIOs to point to the physical proof of all that tech investment, they are in a strong position to push through the digital transformation agenda. Right now execs both understand the relevance of tech and are willing to spend.


The Monday Morning Opener is our opening salvo for the week in tech. Since we run a global site, this editorial publishes on Monday at 8:00am AEST in Sydney, Australia, which is 6:00pm Eastern Time on Sunday in the US. A member writes it of ZDNet's global editorial board, which is comprised of our lead editors across Asia, Australia, Europe, and North America. 


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