Study Shows Significant Opportunity for Companies to Manage IT Spend and Re-Invest Savings in Digital Transformation
Itasca, IL – October 15, 2019 – Flexera, the company that helps organizations realize technology’s power to accelerate their business, announces the findings of the Flexera 2020 State of Tech Spend Report. The first annual Flexera 2020 State of Tech Spend Report provides insight into current and future technology spend from the perspective of enterprise CIOs and IT executives. The report highlights how companies are shifting spending to support their critical IT initiatives, how they’re tracking and managing IT spend, and the challenges they face in optimizing spend.
Survey respondents are IT executives working in large enterprises with 2,000 or more employees, headquartered in North America and Europe, encompassing industries such as financial services, retail, e-commerce and industrial products. More than half are C-level executives.
Complete survey results and highlights are available in the Flexera 2020 State of Tech Spend Report. The survey results are made available under an open source Creative Commons license so the data may be freely shared with the required attribution.
“With this survey, we wanted to gain more insight into how enterprise organizations are embracing digital transformation, cybersecurity, cloud computing and other initiatives,” said Jim Ryan, President and CEO of Flexera. “By doing so, we can then see if/how these initiatives are providing a competitive advantage for their particular industries, as they require sizable investments in technology.
“The survey found that 8.2 percent of respondent revenue is being spend on IT,” Ryan continued, “but the return is dubious at best. It’s likely that many of these investments aren’t attaining maximum ROI, and we identified that 30 percent or more of technology spend is actually being wasted. With the increasing uncertainty of U.S. and global economies, enterprises need to be prepared to manage their operations and finances when—not if—the next downturn kicks in. Proactively being able to dial IT spend up or down is a tremendous opportunity, and there is never a better time to address a potential problem than right now.”
According to survey respondents, increasing spend efficiency and cutting waste are challenging with respect to gaining visibility into costs and managing IT spend effectively. The biggest obstacle to visibility, cited by 61 percent of respondents, is reporting on IT spend by business service. The top challenge to managing spend effectively, cited by 86 percent of respondents, is the large number of manual processes. Considering the magnitude of potential savings, tackling these challenges can have a major impact on the bottom line.
A few key highlights from the Flexera 2020 State of Tech Spend Report:
- Overall, survey respondents’ average IT spend was 8.2 percent of revenue, with organizations in technology, financial services, retail, consumer products, transportation and healthcare industries all reporting IT spend considerably higher than the benchmark of four percent
- The top challenges in gaining visibility of IT spend are:
- Reporting on spend by business service (61 percent)
- Collecting IT spend data (43 percent)
- Reporting on IT spend by application (38 percent)
- Top challenges in managing IT spend are:
o Too many manual processes (86 percent)
o Ensuring spend efficiency/eliminating waste (89 percent)
- Top IT initiatives are digital transformation, cybersecurity and the shift to cloud
- Cloud spend has now surpassed on-premises software spend, with 22 percent going for on-premises software and 25 percent for cloud, including software as a service (SaaS), infrastructure as a service (IaaS) and platform as a service (PaaS)
- As they migrate to cloud, 65 percent of respondents plan to reduce the number of data centers next year
- With the shift to cloud, AWS was cited as the largest vendor of 10 percent of participants – behind only Microsoft and SAP
- Over 80 percent of respondents plan to increase SaaS and IaaS/PaaS spend in the next year
- Legacy vendors had a higher percentage of respondents saying they expect to decrease, rather than increase, spend:
- AWS: 65% of respondents plan to increase spend with AWS; 11% plan to decrease spend with AWS
- Microsoft: 56% plan to increase spend with Microsoft; 12% plan to decrease spend with Microsoft
- ServiceNow: 48% plan to increase spend; 8% plan to decrease
- SalesForce: 48% plan to increase spend; 10% plan to decrease
- Google: 39% plan to increase spend; 8% plan to decrease
- Workday: 38% plan to increase spend; 7% plan to decrease
- SAP: 37% plan to increase spend; 15% plan to decrease
- VMware: 32% plan to increase spend; 22% plan to decrease
- RedHat: 27% plan to increase spend; 11% plan to decrease
- Oracle: 22% plan to increase spend; 30% plan to decrease
- IBM: 19% plan to increase spend; 25% plan to decrease
- Adobe: 10% plan to increase spend; 11% plan to decrease
For more information on the Flexera 2020 State of Tech Spend Report:
- Download the report here: https://www.flexera.com/Tech-Spend-2020-Report
- Sign up for the report webinar here: https://www.flexera.com/Tech-Spend-2020-Webinar
Survey Methodology
The Flexera 2020 State of Spend survey was conducted in July 2019. The survey respondents included 303 respondents in organizations with at least 2,000 employees. They represent IT executives across a broad range of industries.
ABOUT FLEXERA
Flexera helps executives succeed at what once seemed impossible: getting clarity into, and full control of, their company’s technology “black hole.” From on-premises to the cloud, Flexera helps business leaders turn IT insights into action. With a portfolio of integrated solutions that deliver unparalleled technology insights, spend optimization and agility, Flexera helps enterprises optimize their technology footprint and realize IT’s full potential to accelerate their business. For over 30 years, our 1,300+ team members worldwide have been passionate about helping our more than 20,000 customers fuel business success. To learn more, visit flexera.com.
