IT budgets expected to grow slowly in 2016: Security and cloud will suffer

The IT show must go on, but do you know where the most of the IT budget spending will go in 2016? Hint: Think geriatric software.

On the heels of SpiceWorld 2015 last week, Spiceworks, the professional network for IT, today announced the results of its "2016 State of IT" report, a survey examining the technology budget and adoption trends of IT professionals in North America and EMEA.

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According to the survey, IT budgets are expected to increase by only one percent in 2016. And IT professionals will spread that thinly increased budget among all IT projects including server hardware, end user computing, cloud computing, virtualization, productivity software, and operating systems.

So where's the spending gap for next year?

Security.

Surprisingly, security budgets will remain flat year-over-year from 2015 in spite of the dozens of new breaches, organized hacks, and increased amounts of malware for every operating system. IT pros only plan to spend six percent of their total IT budgets on security.

Security statistics at a glance:

  • 59 percent feel their organizations aren't spending enough on security
  • 48 percent feel their companies aren't adequately protected
  • Only 26 percent said that recent high-profile incidents have caused changes in security practices

37 percent of 2016's budgets will go toward hardware purchases, broken down as follows:

  • Desktops - 21 percent
  • Servers - 19 percent
  • Laptops - 16 percent

Consuming 31 percent of next year's IT budgets is software, with the majority of that going to:

  • Virtualization - 15 percent
  • Operating systems - 15 percent
  • Productivity suites - 15 percent

13 percent of IT budgets will be spent on managed services:

  • IT services - 19 percent
  • Connectivity/bandwidth - 14 percent
  • Online backup/recovery/storage/archiving - 13 percent

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43 percent of the respondents said that cloud services will be important to their businesses in the future, while only 29 percent said that they're important to current business practices. And only 14 percent of IT budgets will be spent on cloud/hosted services next year in the following areas:

  • Email hosting - 17 percent
  • Web hosting - 14 percent
  • Online backup/recovery - 13 percent

Other interesting statistics from the survey:

  • 66 percent still run Windows XP
  • 60 percent still run Windows Server 2003
  • 47 percent said they will invest in Windows 10
  • 32 percent are planning a Windows Server 2003 migration
  • 12 percent are planning a Microsoft SQL Server 2005 migration

It might not be completely obvious from the data, but what's driving a majority of the new hardware and software spend is product end of life. Companies are being forced to migrate off of Windows XP, Windows Server 2003, and older installations of SQL Server. Staying current with operating systems, end user software, and hardware to support newer software is a strain on budgets and doesn't leave room for significant security and cloud investment.

Survey Data

The survey conducted in July 2015 included 839 respondents from North America and EMEA. Respondents are among the millions of IT professionals that are part of the Spiceworks community and represent a variety of company sizes including small-to-medium-sized businesses as well as enterprises. Respondents come from a variety of industries including manufacturing, healthcare, non-profits, education, government, and finance.