Despite Downturn, Enterprise IT Budgets Remain Intact

A survey of 137 IT operations leaders at companies in the U.S with at least 500 employees and an annual IT budget in excess of $5 million finds a surprising amount of resiliency at the beginning of the COVID-19 pandemic.

Conducted April 1 by OpsRamp, a provider of IT operations tools, the survey finds more than half of the survey respondents (58%) said they expect to either significantly or moderately increase their annual technology budgets, while 38% plan to either significantly or moderately reduce their technology spending.

The survey also finds 73% of respondents expect to either accelerate or maintain digital transformation initiatives and projects.

Bhanu Singh, senior vice president of engineering and DevOps for OpsRamp, said that at least for now among larger enterprises, digital business initiatives are being accelerated as organizations recraft their business continuity plans. With most customers and employees working from home, the need for applications that digitize business processes has become more critical, especially since no one knows for sure when the COVID-19 pandemic might subside or whether there will be another one, he said.

Many of those projects will rely on cloud-native technologies that make it easier for organizations to scale IT resources up and down, added Singh, noting organizations are quickly discovering that monolithic applications even when they are deployed on a public cloud are not as flexible as they now require.

Specifically, the survey finds IT leaders are investing heavily in AIOps (69%), information security and compliance (62%), self-service platforms (60%), cloud-native observability (51%), network performance monitoring and diagnostics (51%), big data analytics (46%) and cloud infrastructure (45%).

IT leaders are also planning to drive technology vendor consolidation (59%) to reduce costs and rely more on third-party managed service providers (58%).

In terms of hiring, IT financial analysts (68%), cloud architects (53%), DevOps engineers (50%) and data scientists (47%) top the list of priorities.

Of course, as the impact of the COVID-19 pandemic on the global economy becomes more apparent it is too early to say what the impact on IT budgets will be. Industry analysts Gartner and International Data Corp. (IDC) are forecasting a relatively small decline in IT spending of about 5% for the year once the economy begins to recover in the second half. However, it’s clear that certain vertical industry segments, such as travel and hospitality, might have a much longer way to go than, say, healthcare companies.

In addition, it’s likely that much smaller companies than those surveyed by OpsRamp may find it more challenging to restart operations after being forced to lay most of their employees in some cases.

Whatever the timing, the one probable thing is many of the IT trends that were just beginning to gain traction are likely to see accelerated adoption once the economy recovers. There will be a natural tendency to limit the adoption of new platforms and processes in the short term. However, now that it’s clear existing platforms and processes are not especially flexible it’s only a matter of time now before most of them one way or will be replaced or at the very least completely modernized.

Mike Vizard

Mike Vizard is a seasoned IT journalist with over 25 years of experience. He also contributed to IT Business Edge, Channel Insider, Baseline and a variety of other IT titles. Previously, Vizard was the editorial director for Ziff-Davis Enterprise as well as Editor-in-Chief for CRN and InfoWorld.

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