Knowing which technologies are on the way out and where you should ramp up IT efforts in 2014 could mean the difference...
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between profit and loss.
But navigating the ever-changing IT space is a daunting challenge -- with your business hanging in the balance. TechTarget recently surveyed over 4,100 IT professionals to learn about their IT priorities and to gauge changes on the horizon for 2014. Here's what we found:
IT goals for 2014
Any adjustment to IT -- and its role in everyday business operations -- must start by reviewing and establishing a new set of goals. More than 4,100 IT professionals shared their thoughts on the changing focus for their departments, and 37% plan to expand IT to support business growth. Organizations depend on computing as a critical business resource; as the scope of employees, partners and users grows to global proportions, IT must have appropriate computing levels in place to handle the load.
Even when growth is not the top priority, there are always opportunities to enhance the business with key IT projects, and 23% of IT professionals reported selective spending in some technological areas. This may include initiatives like data protection, strategic upgrades to network infrastructure, deploying a virtualization or consolidation project, or some other targeted technology that offers a measurable business benefit.
Organizations now realize that even the most talented and well-paid IT employees can't help the business when they are preoccupied with mundane data center tasks like server provisioning, monitoring and other day-to-day "firefighting." This has brought new attention to the importance of data center automation, and 20% of survey respondents plan to increase the use of automation in the business, which frees IT to focus its attention on more strategic projects.
"Firefighting is going to happen," said Chris Steffen, director of IT at Boulder, Colo.-based Magpul Industries Corp. "Having a centralized suite of management tools makes firefighting much easier."
IT budgets increase in 2014
The last recession cycle has been difficult for businesses and IT departments. Lower budgets have curtailed everything from IT staffing to equipment purchases to software updates. As the economy eases out of recession, IT spending is creeping up. Where 59% of respondents reported a budget increase in 2013, 65% expect a budget increase in 2014. Over 1,500 respondents reported where the budget increases will be spent.
The biggest emphasis of 2014 budget increases will be on tangible goods, with 59% of IT professionals planning to purchase new software. This usually involves software upgrades for existing products along with new software tools (such as cloud management or IT automation tools to support the business).
"Companies see the push for automation as an opportunity to consolidate, reduce costs, increase automation," said Pete Sclafani, chief information officer at 6connect Inc., a software-defined network software provider based in San Francisco. "But these new tools must integrate with each other using multi-tenant/Web service APIs [application programming interfaces] -- and hopefully [will] not require legacy approaches based on proprietary hardware."
At the same time, 52% of respondents plan to purchase new hardware to expand computing capacity and increase energy efficiency.
Increased IT budgets will also have an impact on data center operations, and 35% of IT professionals expect to spend more on maintenance, which can range from software licensing to routine hardware services to infrastructure projects like electrical subsystem and mechanical air conditioning work. Organizations may need to catch up on some maintenance issues ignored during leaner budget years. Another 31% of organizations may add IT staff in 2014 to meet the overall goals of business growth and targeted IT projects.
Next year's budgets also reflect a shift in IT from a business expense to a business utility -- especially in the use of computing services -- and 38% of respondents expect to grow spending in public and private cloud services.
Cloud technologies are important elements in IT automation (e.g., self-provisioning and chargeback) and greater IT staff efficiency. When data centers simply cannot grow any more or off-site computing resources are needed to support the business, outsourcing can provide effective alternatives to in-house IT; 18% of respondents plan to increase the use of outsourcing providers in 2014. Sclafani also noted that automation in other aspects of the infrastructure -- such as network switching and routing -- are on the horizon for data centers.
When IT budgets are cut
Unfortunately, not every IT budget will increase in 2014; 13% of survey respondents are faced with the prospect of maintaining current service levels with flat budgets, while another 7% must reduce IT spending.
Some businesses are still mired in the aftermath of the last recession, while other businesses may have already completed major IT initiatives and may not require previous funding for the coming fiscal year. Regardless of the reason, lower budgets will put enormous pressure on IT, and 335 survey respondents reported how budget cuts will affect IT spending.
Hardware is first on the chopping block, according to TechTarget's survey data, and 61% of respondents faced with lower budgets will curtail hardware spending. Capital expenses like this are easiest to cut, and technologies like virtualization make it possible to increase utilization and extend the working life of existing systems.
By comparison, only 44% of respondents noted that budget cuts will affect software purchases. Software applications and tools are the foundation of any business, and it's much harder to continue running the business without current software.
Meanwhile, IT budget cuts demand the most innovative thinking and lead to groundbreaking projects. For example, the astounding growth of server virtualization and consolidation was largely driven by budget reductions caused by the latest recession (which some organizations are still grappling with today).
Lean budgets will also shave maintenance and staffing efforts. Consider that 39% of respondents with smaller budgets will seek to reduce IT staffing. This may simply be a matter of foregoing new hires or leaving job requisitions unfilled, but may also include staff reductions. Businesses will depend on higher levels of IT automation tools to help address reduced IT staffing. Otherwise, organizations risk compromising service levels for both internal and external users.
"This highlights the need to identify automation solutions with flexible deployment models for pricing flexibility and operational robustness," Sclafani said.
Survey results also showed that 37% of IT planners facing smaller IT budgets will cut back on maintenance, forestalling software upgrades and potentially relying on previous consolidation projects to reduce hardware dependencies, and will turn to alternative computing resources like cloud; both initiatives reduce the data center server count and supporting systems. However, Steffen pointed out that those maintenance cutbacks can be more challenging in today's climate of subscription-based software products, as many require an annual fee to continue using them.
Survey data reported 34% of budget-strapped organizations will reduce outsourcing efforts -- likely because of broader business conditions that require reductions in monthly operating expenses. In many cases, some outsourced workloads can be brought back in-house and run on excess computing capacity in the local data center. However, only 7% of respondents would consider reducing their cloud investment, though cloud is still a fairly new technology with limited adoption anyway.
"Do IT managers and C-table execs see the value of their cloud spend, or do they not have the tools to calculate the TCO [total cost of ownership] of their cloud spend?" Steffen said.
Regardless of your purchasing intentions for 2014, successful IT goes far beyond line items and purchase requisitions. IT professionals can now draw on an extensive array of innovative computing technologies, management tools and utility computing alternatives to meet the organization's needs. Unlike decades past, making the right IT choices for 2014 takes a keen knowledge of business goals and regulatory needs, a thorough understanding of the available options, and development of a long-term strategic plan that allows IT to meet those goals.