Spending reports signal increased reliance upon software

Spending reports signal increased reliance upon software

Cloud computing and the as-a-service revolution have had a profound impact on organizations in virtually every industry. First, technology became a central and necessary component of operations in a wider variety of environments and scenarios, especially given the mass digitization of data. Then, it became clear that many organizations - especially smaller ones - would not be able to foot the bills associated with the technologies they needed. 

As necessity is the mother of invention, cloud computing and managed services began to grow quickly thanks to massive demand. Now, companies can implement all the technology they need through managed services, paying as they go rather than putting up the massive upfront costs associated with servers, data centers and other equipment. Two new reports signaled that these trends in IT spending are likely to continue through 2017 and beyond. 

Software, front and center
International Data Corporation recently forecast small and mid-sized business spending on software to be higher than their expenditures related to hardware by 2018. Should this come to fruition, it would be the first time in history spending tilted in this direction, as the lion's share of SMB tech investments have always gone to hardware. However, the analysts attribute this to a more mature mentality among SMB leaders, specifically in terms of business process management's demands and the necessity of digital transformation. 

"Changing SMB attitudes regarding the importance of technology investment cut across company size and region categories," IDC SMB Research program vice president Raymond Boggs affirmed. "Small and midsize firms in developing geographies are just as interested in leveraging technology as those in developed regions. This sets the stage for spending growth everywhere, especially in midsize firms."

Another obvious component of this shift involves cloud computing. 

Spending on software is rising quickly. Spending on software is rising quickly.

All-in on public
Gartner recently stated that public cloud services will see investment gains of 18 percent this year, reaching $246.8 billion globally. Interestingly, the researchers believe the areas with the biggest opportunities for growth include cloud-based business process management, application services, system infrastructure services and advertising. 

"As enterprise application buyers are moving toward a cloud-first mentality, we estimate that more than 50 percent of new 2017 large-enterprise North American application adoptions will be composed of SaaS or other forms of cloud-based solutions," Gartner Research Director Sid Nag explained. "Mid-market and small enterprises are even further along the adoption curve. By 2019, more than 30 percent of the 100 largest vendors' new software investments will have shifted from cloud-first to cloud-only."

This shows that the trend toward cloud computing-based IT rages on around the globe and in the United States. Organizations that have not started to leverage cloud-based solutions for their accounting departments, general business process management, workflow automation and other centerpieces of modern operations should do so as soon as possible. 

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