IT Spends getting affected by AAS, can go up 2 pc

SINGAPORE: Global IT spending will be up slightly in 2013, according to a new report from Forrester on the 2013 budget priorities of CIOs. On average, firms plan to increase their technology spending by 2.0 per cent in 2013. However, this is less than the forecasts for output, suggesting that firms still seek to increase productivity by cutting costs, in addition to expanding the output of their BT assets.

Looking beyond the global averages, data from the report indicates that not all regions expect the same spending changes, nor that all classes of technology are getting the same investment treatment. For example, More respondents in the Asia Pacific (AP) region expect big growth in IT spending. In keeping with recent trends, 18 per cent of AP respondents indicate that their firm's IT spending will increase by seven per cent or more, followed by Latin America, where 16 per cent of respondents expect IT expenditure growth to top seven per cent. Europe is particularly cool on hot growth: Only nine per cent of European respondents foresee more than seven per cent IT spending growth.

The press note adds that in no region do more than 50 per cent of firms expect IT spending growth. In Latin America, 47 per cent of respondents expect their IT expenditures to grow, higher than any other region. Notably, almost the same percentage of North American respondents as Asia Pacific respondents expect IT spending growth in 2013, although more North American respondents overall expect growth to be smaller.

Subscription-based, "as-a-service" spending is affecting other categories. In the Forrsights Budgets And Priorities Tracker Survey, as-a-service expenditures are captured in the software category. Accelerating adoption of as-a-service software options is shifting spending in multiple ways. First, in the software category, it is undermining traditional software deals, which feature big upfront expenditures, thus reducing current-year spending on software. Second, as-a-service options typically require 10 per cent to 15 per cent of the consulting and integration fees of on-premises options, which is taking a significant bite out of the IT consulting and outsourcing and contractor sectors.