Forrester: IT maintenance saps budget as tech spending increases

Technology spending is set to rise modestly, but the majority of IT spending will still go on maintaining existing systems

Technology spending is set to rise by a modest 5.3%, but the majority of IT spending will still go on maintaining existing systems, Forrester Research has predicted.

In its latest forecast, the analyst firm stated: "In recent years, the growth in new project spending has been modest, as firms held back in launching major new tech projects due to uncertain business outlooks. However, we expect that new project spending will rise in many countries in 2015 and 2016."

Forrester’s Global Tech Market Outlook for 2015 and 2016 report predicted the majority of new project purchases will go on software and implementation services. 

"A small amount will go for hardware to run the software, but that is declining as server virtualisation and SaaS [software as a service] reduce or eliminate the linkage between new software and new hardware," the report stated.

"A slightly larger amount of new projects will go for new hardware types, such as projects to implement tablets, new storage architectures, or more advanced LANs [local area networks] or WANs [wide area networks]. And there will be some new outsourcing projects."

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Forrester expects a focus on revenues will drive business technology investment. However, as recently covered by Computer Weekly, CIOs need to juggle the time and resources spent on supporting existing IT operations with projects that are able to deliver genuine innovation.

The majority of IT spending ($620bn) in 2015 will be on process and desktop applications, followed by middleware and custom applications built by contractors and consultants. This represents an increase of 7.1% over software spending in 2014. It is expected to rise by 9.2% in 2016, putting the percentage increase almost up to the figures in 2011.

Forrester expected services spending will reach $520bn in 2015, while spending on traditional outsourcing and infrastructure as a service is anticipated to reach $456bn.

IT spending will grow fastest in the US, but the tech markets in the Netherlands, South Korea and the UK are already posting solid 5% or better growth in 2014, Forrester noted.

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