Study: IT Professionals Prioritizing Hardware As Top 2015 Investment

IT professionals are looking to invest in hardware in 2015, a recent IT budget survey conducted by Austin, Texas-based market research company Spiceworks found.

A study of various small and large IT professionals across North America revealed that hardware projects will make up more than 42 percent of the average $291,062 budget in 2015. Software projects fell at a lower priority, making up only 34 percent of that average budget, the study said.

Aging hardware is a key factor in driving companies to increase their investment in hardware projects, said IT content marketing manager Peter Tsai. He pointed to Windows Server 2003 -- Microsoft's operating system that will reach end of life in July -- as another reason behind the churn.

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"More than 62 percent of devices in the survey were four years or older ... in IT years, that's ages," he said. "That could be indicative of IT departments not having big enough budgets over the past few years to replace their hardware. People have known about this issue for a while ... but it was a challenge because many companies weren't seeing their budgets go up."

Kyle Cebull, CMO of Fort Myers, Fla.-based solution provider Entech, said he is seeing the survey results through his own clients, and called the situation the "perfect storm of aging hardware and end of life, coupled with companies facing explosive growth."

"We definitely saw a lot of this in 2014 and expect the same in 2015," he said. "A lot of this new investment stems from the period of uncertainty in 2008 to 2012 where, due to the economy, many companies would only upgrade hardware that absolutely needed it, but nonessential equipment was left behind. Now, we're seeing a catch-up factor. While before we were getting pushback from clients who couldn’t afford upgrades, we're now hearing from our clients who are in a position to grow."

Of Entech's clients, approximately 30 percent to 40 percent are currently on Windows Server 2003, meaning that they are beginning to map out both software and hardware changes, Cebull said.

"A couple of major platforms that are Microsoft-specific are reaching their end of life," he said. "[The investment in hardware] goes hand-in-hand with Server 2003's end of life in July. Companies are recognizing that it's time to plan ahead and look at what needs to be done and replaced."

Tsai agreed, adding that the study also forecast operating systems as a top investment in the software space for 2015. Other than operating systems and virtualization, companies also prioritized backup and productivity projects.

"Operating systems and virtualization continue to see investments, especially as companies move away from Windows XP and near the end of Windows Server 2003," Tsai said. "In terms of operating systems, we've seen a trend of IT companies moving away from physical devices to virtualization, so that's not too surprising."

NEXT: Study: Desktops, PCs Make Up Hardware Investments

Companies said in the survey that they are investing in hardware-prioritized desktops, servers and laptops over smartphone and tablet-related projects, a revelation Tsai said was somewhat surprising but understandable.

"There's a lot of buzz around mobile phones and laptops taking the place of desktops and PCs," he said. "It seems that PCs are tried-and-true, and many companies are using mobile devices and tablets as secondary units. Tablets are powerful enough to replace desktops, and I think it's an emerging trend, but still needs some time."

A report released recently by market research firm IDC perpetuated that belief, highlighting a 4.7 percent increase in the fourth-quarter U.S. PC market from last year's shipment levels.

Entech's Cebull said that the different hardware platform priorities varies across the board for his clients.

"Some companies don't want to move away from their desktops or laptops. It depends on the environment," he stressed.

PUBLISHED JAN. 23, 2015