IT SMB 2013 Budget Report

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Budgets among SMBs have been on the rise for the past few years, and in our recent 2H 2012 State of SMB IT report we found that they’ve reached their highest point during that time. Over the last year, budgets grew 13% worldwide and reached an average of $162,000 with EMEA clocking in at $151,000 on average.

To dig a little deeper, we spoke to over 900 IT pros to find out how they go about creating and managing their IT budget and where they plan to put their dollars in 2013. Results show that as investment in IT continues to grow, IT pros will most likely spend as follows:

• Invest close to 50% of average budget on new projects
• Regard hardware and software as a top priority for 2013 spend
• Continue to invest more in cloud-based services and mobile

This report highlights both worldwide findings as well as a breakout for Europe, Middle East and Africa (EMEA).

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IT SMB 2013 Budget Report

  1. 1. Voice of IT December 2012 TM SMB IT Spending: How IT Pros Approximately how much does your company plan to spend this year (in USD) on IT hardware, software (licenses/purchases) and services (online services such as hosting, email, telecom, bandwidth, etc.)? are Creating and Managing 2013 $152k $162k $151k* $122k Budgets $132k $143kBudgets among SMBs have been on the rise for the past few years, and in our recent 2H 2012 State of SMB ITreport we found that they’ve reached their highest point during that time. Over the last year, budgets grew13% worldwide and reached an average of $162,000 with EMEA clocking in at $151,000 on average.To dig a little deeper, we spoke to over 900 IT pros to find out how they go about creating and managing theirIT budget and where they plan to put their dollars in 2013. Results show that as investment in IT continues togrow, IT pros will most likely spend as follows:• Invest close to 50% of1H 2011 budget on new projects 2H 2010 average 2H 2011 1H 2012 2H 2012• Regard hardware and software as a top priority for 2013 spend Worldwide EMEA• Continue to invest more in cloud-based services and mobileThis report highlights both worldwide findings as well as a breakout for Europe, Middle East and Africa (EMEA).Planned Budgets Over Time* Approximately how much does your company plan to spend this year (in USD) on IT hardware, software (licenses/purchases) and services (online services such as hosting, email, telecom, bandwidth, etc.)? $162k $152k $151k† $143k $132k $122k 2H 2010 1H 2011 2H 2011 1H 2012 2H 2012 Worldwide EMEA * Source: Spiceworks State of SMB IT 2H 2012 † 2H 2012 was the first time EMEA data was reported separetely from worldwide.
  2. 2. SMB IT SPENDING: HOW IT PROS ARE ALLOCATING AND MANAGING BUDGETS IN 2013Where the 2013 Dollars are Headed.Let’s start by uncovering where IT pros plan to focus their spend in 2013. In the coming year, IT pros will bespending slightly more than half of their budget on the projects they were working on in 2012, and thenusing the remaining dollars for new projects.Average Percent of Budget Toward New vs. Exisiting Projects What percent of your annual budget is going toward the following types of projects? Worldwide 48% 52% EMEA 45% 55% New Exisiting Respondents: Worldwide (756) - EMEA (165)For both worldwide and EMEA IT pros, the top three focuses for the IT budget are hardware and softwarewith laptop/desktop, servers, and software being the top focus areas for over 40% of IT pros. Virtualizationand networking are not far behind and mentioned by approximately a third of respondents as a top3 focus for their budgets. Despite all the buzz, cloud-based services and mobile received the fewestmentions as a top 3 focus area for 2013.Top 3 Focus Areas for IT Budget What are the top 3 focuses for your budget next year? 50% 48% 45% 44% 43% 41% 41% 40% 37% 34% 33% 30% 30% 28% 24% 20% 20% 19% 18% 17% 16% 15% 10% 6% 4% 0% La e s k Se So Vi Ne St Se Cl rvi M Ot leas rtu ob ou ce or pt to rv cu he e s ftw tw D se p ag er op p d- s ile rit a r, pe or ar liz e ba y / ki e at ng se io d n cif y Worldwide EMEA Respondents: Worldwide (927) - EMEA (198) 2
  3. 3. 2012 2013 2012 2013 2012 2013 2012 2013 2012 2013 2012 2013 Virtualization Cloud-Based Services Mobile SMB IT SPENDING: HOW IT PROS ARE ALLOCATING AND MANAGING BUDGETS IN 2013 Worldwide EMEA What percent of your overall budget will be spent on the following categories?An Uptick in Tech Spend. THIS YEAR 23% THIS YEAR 12% 14% THIS YEAR 15% 16%Even though NEXT YEAR data shows that cloud and 24% 25% mobile are not rising to the top of NEXT 16% 18% YEAR 18% 19% the list of 2013 spend priorities, NEXT YEARwe believe that they are growth areas due to the disruption in mobile (with BYOD and tablets) and thegrowing confidence in cloud-based services. Cloud-Based Services out how these shiftsMobile Virtualization Therefore, to find are impacting the ITbudget over time, we asked respondents the percent of budget they dedicated to these technologies in Worldwide EMEA2012 and what they plan to dedicate in 2013. The findings show that for cloud-based services and mobile,both are on the uptick and will grow to approximately one-fifth of 2013 worldwide IT spend. What percent of your overall budget will be spent on the following categories?Another technology that’s gained strong traction among SMBs is virtualization. While this ranks 4th THIS YEAR 23% 23% 12% 14% 15% 16%among worldwide top focus areas in 2013 and 5th among EMEA, the actual amount of budget dedicated NEXT YEAR 24% 25% 16% 18% 18% 19%to this technology will stay steady—receiving an average of close to a quarter of 2013 budget spend. Virtualization Cloud-Based Services MobileAverage Worldwide of Budget Spend in 2012 vs. 2013 Percent EMEA What percent of your overall budget will be spent on the following categories? 24% 25% 19% NEXT 18% NEXT 18% YEAR NEXT 16% YEAR YEAR THIS YEAR 23% 23% THIS YEAR 14% 12% THIS YEAR 15% 16% Virtualization Cloud-Based Services Mobile Worldwide EMEA Respondents: Worldwide (686-742) - EMEA (140-153) Tech Marketer? See what IT pros are saying about you with the Spiceworks Dashboard Sign up FREE at www.spiceworks.com/marketing/dashboard 3
  4. 4. SMB IT SPENDING: HOW IT PROS ARE ALLOCATING AND MANAGING BUDGETS IN 2013 Calling the Budget Shots. Now that we know where the dollars are going, let’s take a look at how SMB IT pros create and manage their budgets. Over half of the respondents in this survey are the point person at their company for making recommendations on how the budget is spent (54%) and/or spending the budget (58%). Roughly a third are responsible for creating (31%) and managing (39%) the tech spend. In EMEA specifically, IT pros are more likely to be involved in managing the budget (45%) and spending the budget (62%) than IT pros worldwide. Level of Responsibility for IT Budgets What is your role when it comes to developing and managing the IT budget for your company? I spend the budget 58% 62% I make recommendations on 54% how we spend our budget 55% I provide input in 46% developing the budget 46% I manage the budget 39% 45% I create the budget 31% 32% I am not involved with budget 10% or spending for our department 10% 0% 10% 20% 30% 40% 50% 60% Worldwide EMEA Respondents: Worldwide (942) - EMEA (200)It is interesting to note that not all tech dollars are being spent in the IT departments. Forty-seven percentof respondents state that other departments are using their own budgets to purchase IT technologies ordevices. This is similar for EMEA respondents with half stating that IT spending happens outside of theirdepartment. IT Spending in Other Departments “ Does any of the spending on IT technologies or devices FROM THE COMMUNITY for your company happen outside of the IT department? We have departments going out and spending thousands of 7% 7% “ Yes dollars to develop mobile apps without approval from IT and 46% 47% 43% 50% No keeping the devices away from IT’s hands. Don’t know J Barnett Sharepoint Designer Worldwide EMEA community.spiceworks.com Respondents: Worldwide (926) - EMEA (198) 4
  5. 5. SMB IT SPENDING: HOW IT PROS ARE ALLOCATING AND MANAGING BUDGETS IN 2013 4% 10% 27% 26% 5% 6% 31% 28%When to plan?There is not a whole lot of lead time in developing the IT budget for SMBs. Over half (53%) of respondents At least 1 year 6-12 months 3-6 months 1-3 months 2013start planning only 6 months in advance when it is time to start spending. in advance in advance out from in advance And a quarter of respondentsworldwide do not have any formal budget planning. 25% 9% Don’t knowEMEA IT pros are only slightly more likely to plan do any at least 6 months in advance (59% vs. 53% of We do not budgets formal budget planning 22%worldwide IT pros). 9% Don’t know Worldwide EMEAIT Budget Planning When does your company start planning for next year’s budget? 6-12 months in advance 3-6 months 10% in advance 6% 27% 31% 2013 1-3 months in advance 26% 28% At least 1 year in advance 4% 5% Worldwide EMEA 25% We do not do any formal budget planning 22% We do not do any formal budget planning 9% Don’t know 9% Don’t know Worldwide EMEA Respondents: Worldwide (939) - EMEA (197) 5
  6. 6. Does your company have a “use it or lose it” policy for your department’s annual budget? SMB IT SPENDING: HOW IT PROS ARE ALLOCATING AND MANAGING BUDGETS IN 2013 14% 23% 17% 27% Yes NoOutside Factors Impacting IT Spend. Don’t know 63% 56%While IT pros do their best to develop a budget to meet their company’s needs, a variety of corporatepolicies or practices can impact how they go about managing and spending their budget throughout the Worldwide EMEAyear. Two specific areas we asked about were the likelihood of getting additional budget during the yearand whether or not their company supports a “use it or lose it” policy.The results show a good amount of IT departments anticipate receiving extra funds headed their way withnearly half your company have a “use itthey are it” policy for your department’s annual budget? year Does of respondents (45%) stating or lose likely to receive additional budget throughout theworldwide and 42% in EMEA. Worldwide 63%Likelihood of Receiving Additional Budget During Year 23% 14% EMEA How likely is it that your department will receive additional budget throughout the year? 56% 27% 17% Very likely 11% Yes 13%No Don’t know 10% 11% Somewhat likely 9% 45% 42% 12% Neither 32% 31% 19% Likely to receive 21% Likely to receive Not very likely additional budget additional budget Does your company have a “use it or lose it” policy for your department’s annual budget? 17% 16% Not at all likely Worldwide Don’t know Worldwide EMEA 23% 63% 14% Respondents: Worldwide (938) - EMEA (200) EMEA 27% 56% 17%Only 23% of respondents have a “use it or lose it” policy and need to make sure all dollars are unloaded byyear end. EMEA shows similar results with 27% having a “use it or lose it” policy. Yes No Don’t know“Use it or Lose it” Budget Policy “ Does your company have a “use it or lose it” policy FROM THE COMMUNITY for your department’s annual budget? I’ve found that the budget Worldwide process is an ongoing process 23% EMEA 63% 14% not a once a year event. Birdra IT Manager “ community.spiceworks.com 27% 56% 17% Yes No Don’t know Respondents: Worldwide (937) - EMEA (196) 6
  7. 7. SMB IT SPENDING: HOW IT PROS ARE ALLOCATING AND MANAGING BUDGETS IN 2013Survey MethodologyThe results in this report are from a recent Voice of IT® survey conducted with 942 SMB IT pros worldwidefrom companies with less than 1000 employees. Nearly two-thirds of respondents are from North Americaand close to a quarter are from EMEA. By company size, over half (54%) are from companies with less than100 employees. Company Size Region Latin America 250+ Asia employees Pacific 4% 17% 1-19 employees 11% North 19% EMEA America 29% 23% 48% 63% 100-249 employees 35% 20-99 employees About Spiceworks Voice of IT® The Spiceworks Voice of IT® market Insights program publishes stats, trends and opinions collected from small and medium business technology professionals that are among the more than 2M users of Spiceworks. Survey panelists opt-in to answer questions on technology trends important to them. About Spiceworks Spiceworks™ the world’s largest social business platform for IT, connects 2 million IT professionals with more , than 1,200 technology brands. By combining a Facebook-like community with free IT management software, Spiceworks helps businesses to discover, buy and manage $350 billion worth of technology products and services each year. To learn more, visit: Be first to hear about Spiceworks Voice of IT® insights, email: http://www.spiceworks.com/voice-of-it marketresearch@spiceworks.comThe contents in this report are a result of primary research performed by Spiceworks. Unless otherwise noted, the entire contentsdistributed as part of this report are copyrighted by Spiceworks. As such any information made available by any means in this report maynot be copied, reproduced, duplicated, published, displayed, transmitted, distributed, given, sold, traded, resold, marketed, offered for sale,modified to create derivative works or otherwise exploited for valuable consideration without prior written consent by Spiceworks. Formore information visit www.spiceworks.com/voice-of-it/terms.This report contains information of fact relating to parties other than Spiceworks. Although the information have been obtained from, andare based on sources that Spiceworks believes to be reliable, Spiceworks does not guarantee the accuracy, and any such information mightbe incomplete or condensed. Any estimates included in this report constitute Spiceworks’ judgment as of the date of compilation, and aresubject to change without notice. This report is for information purposes only. All responsibility for any interpretations or actions based onthe information or commentary contained within this report lie solely with the recipient.All rights reserved. 2012. 7

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