IT Budgets Continue to Rise Despite Economic Downturn

The field of IT has been a hotbed for investments for decades by this point, and a massive indicator of this can be seen with so many IT companies getting funding despite the dire economic predictions that are being made for next year. A side effect of such heavy investment is that the IT industry is better able to weather periods of economic turmoil, and that is why so many IT companies are planning to increase their budgets by next year.

This data comes from a report that was released by Spiceworks Ziff Davis, and one thing that this report reveals is that 60% of larger businesses across North America and Europe are readying themselves for a continued economic recession. In spite of the fact that this is the case, only 45% of small businesses said the same, likely because they need to keep their growth rate high and take on more risk than their larger counterparts.

With all of that having been said and now out of the way, it is important to note that these numbers are skewed a bit due to European numbers. If you take a look at just the numbers for North America, this paints a very different picture. Only 41% of IT companies based in North America are preparing for a recession with all things having been considered and taken into account.

Regardless of the potential economic downturn in 2023, about 61% of companies across the world who have more than 500 employees are planning to increase the budgets for their IT departments. That is especially surprising because of the fact that this is the sort of thing that could potentially end up taking money from other departments that are being forced to tighten up their belts.

If we widen the lens to take a look at all companies, 51% plan to increase their IT budgets. Interestingly, only 6% plan to decrease their investments into the IT sector, so barely any company thinks that anything takes precedence over IT when it comes to apportioning out their budget for the upcoming fiscal year.

However, inflation means that these budget increases will go less towards upgrades and more towards maintaining the same level of IT processes. Inflation is making money worth less than might have been the case otherwise, so companies might need to up the ante just to stay on par with their competitors. The few that are decreasing their IT budgets are likely doing so because this is not a priority for them.

Upgrading their systems is important, but most companies are focusing on things that take precedence over this such as cybersecurity. Ransomware and other forms of malware attacks are wreaking havoc with companies, and they need to invest heavily into cyber security otherwise their businesses will continue to get disrupted by malicious actors.

All in all, it seems like the state of IT is more or less secure based on the findings in this report. We will have to wait and see if next year plays out any differently, since two consecutive years of economic downturns are likely going to cause massive problems that would take the steam out of otherwise stable industries such as IT.

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