Allocating Your SMB's IT Budget in Today's Environment

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Where Small- Medium Businesses are Currently Spending their IT Budgets

Businesses are in a tricky spot in 2018.  Global political uncertainty and flat company revenues mean IT budgets most likely won't be increasing. The good news is technological advances are allowing businesses to get more for less, and with a properly allocated budget your business can do the same.

Hardware and software

Research from Spiceworks, a network of IT professionals, suggests the bulk of financial allotment for the year ahead should remain with hardware (37% of overall budget) and software (31%). A combined 68% from these hand-in-hand tools is no surprise since these are the essential building blocks of any business. In order to skyrocket your business, you need a solid foundation. 

What will force IT departments to spend money on software this year is less likely to be new features than simple end-of-life replacements. According to Spiceworks, 46% of companies still use Microsoft Office 2003 on at least one computer. Even more startling is the ghost of Office 97 is still haunting 3% of companies. Software that is old enough to have a beer needs to be dropped in order to get the most out of your employees and their time.

Virtualization and productivity are at the top of the tree when it comes to priority updates.

Cloud and Hosted Services

This coming year there will be more spending than ever on cloud-based services – 38% of respondents consider the cloud very or extremely important to their current business practices (compared to 29% last year). This is due to the cloud's increased safety and ease of use in recent years. Email hosting is predicted to take up much of the 14% overall budget allocation in the cloud sector with online backup and recovery a close second.

Managed Service Projects

Remote Management and outsourcing of company IT infrastructure will take up 13% of the budget total. As headcounts shrink, IT departments are going to have to be more strategic in how they use people and outsourcing to managed service providers will become a necessity.

AI, VR and 3D

Artificial intelligence, virtual reality and 3D printing are out of the lab and into real world applications. The remaining 5% of budget spend is predicted to be invested in making these systems a part of everyday use.

For the Visuals out There

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What do I do with this Information?

As you know by now every business is vastly different in their needs and budgets. This is a snapshot of where businesses like yours are currently allocating their IT budget. Also take into account that as technology advances and becomes more practical, you can expect to see the percentages allotted to the cloud and AI increase. Being on top of new technology in your industry can really set your business apart from competition and make your employees much more efficent.

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