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article imageFirms allocate bigger IT budgets as interest in AI and IoT mounts

By James Walker     Oct 13, 2017 in Technology
IT department budgets are set to increase in 2018 as firms dedicate resources to experimenting with AI and the Internet of Things. The drive towards the digital economy, automation and cloud-based analytics is leading businesses to prioritise IT spending.
Spiceworks' 2018 State of IoT report found 87 percent of businesses surveyed intend to stabilise or grow their IT budget in 2018. In many cases, this will lead to the hiring of new staff specialised in emerging areas of IT. Cloud services, automation, AI and VR are the biggest areas of interest, widely seen to offer transformative business impacts.
Larger firms look to the cloud
Most firms are preparing to allocate more resources to purchasing new cloud-based software. This spending isn't evenly distributed though, with smaller companies more likely to prioritise new hardware or on-premises software. 66 percent of companies with 1,000-4,999 employees said they'd spend more on cloud products next year while 72 percent of organisations with over 5,000 employees reported a budget increase.
Contextual information is an important part of cloud technology  especially when talking to someone ...
Contextual information is an important part of cloud technology, especially when talking to someone in a call center.
SMBs are tending towards purchasing more regular computer hardware, such as desktops and laptops. Only the larger firms seem to be prioritising cloud-oriented gear, such as networking equipment and server room maintenance. This finding points to a growing divide between the digital agility of small and large organisations.
"When looking at hardware budget breakdown by company size, smaller and mid-size outfits are more likely to invest in desktops in 2018," said Spiceworks. "Larger companies are much more likely to invest in power and climate to help ensure smooth sailing in the server room."
Small businesses still inexperienced
Small companies that are utilising cloud-hosted software are generally using it as a replacement for on-premises packages. Amongst firms under 5,000 employees, cloud hosted products are most commonly used for backup storage, productivity services and email hosting.
Adoption of IaaS, PaaS and industry-specific apps is much lower than in firms above 5,000 employees. They are splitting their cloud budgets much more equally, testing out new "as-a-service" categories and relying on cloud providers to manage areas of their business.
AI and IoT a major focus
Across all organisations, interest in new technologies is high. 29 percent of firms have adopted IoT, with a further 19 percent planning to do so over the next year. By the end of 2018, 32 percent plan to be using VR and 30 percent intend to bring AI into their business. The potential efficiency improvements offered by these technologies aren't going unnoticed.
Customers increasingly want specialised IoT  not generic solutions
Customers increasingly want specialised IoT, not generic solutions
Field Engineer / Pexels
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The report suggests that most businesses are aware of the changing dynamics in the IT industry. It seems as though only larger firms are positioned to take advantage of the trend. Smaller firms are being constrained by a lack of resources, leaving them unable to access the full possibilities of the cloud.
The widespread adoption of emerging concepts, like IoT and VR, reveals optimism for the future is high. Small companies need to be able to access these technologies too though. Otherwise, the skills gap between them and their larger counterparts could be exaggerated by the digital economy, despite technology's potential to create a more accessible business climate.
More about digital transformation, digital disruption, Digital, Ai, IoT
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