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Growing IT budgets need to be spent wisely to balance ambition and risk

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Has there ever been a time when IT leaders didn’t want more budget? The answer is probably not, because there is always more that tech can do, new challenges and opportunities and, just like any asset, IT can break, gets old and needs replacing. So, it’s always interesting to see how IT leaders view their budgets and to what extent their needs are met by those holding the purse strings. Recent research published by Node4 has shed some light on these issues.

At the headline level, the research revealed that despite four in five (81 per cent) IT leaders expecting their budgets to increase across 2019, 23 per cent of them believe that this will not be enough to meet their strategic ambitions. And more specifically, a third of IT leaders (32 per cent) are concerned that they will struggle to maintain cyber defences on current budgets.

The Mid-Market IT Priorities Report, which surveyed 300 mid-market IT decision-makers, including IT managers, CIOs, IT directors and Heads of IT, revealed that of those who would like additional IT funding, two thirds (65 per cent) believe they would require a budget increase of up to 15 per cent to ensure that they are able to meet the needs of their business.

The report also looked at how IT leaders in organisations from a range of industries are managing both their existing and new technologies. In particular:

  • Budgets are a cause for concern as IT leaders struggle to meet demands. Two thirds (65 per cent) of those that believe their 2019 budgets do not go far enough, feel that they would require a budget increase of up to 15 per cent to ensure that they are able to meet the needs of their business amidst increasing cybersecurity concerns.
  • Data loss is the biggest security concern. 42 per cent of respondents stated this was the most difficult challenge they faced when trying to keep their organisation secure, while a close second was concerns about data in the cloud not being as rigorously protected (38 per cent). A quarter of those asked also believed their cyber security defences would not be adequate if targeted in an attack.
  • This year, IT leaders are focusing on security ahead of innovation. Data privacy was the main objective of 42 per cent of respondents, followed by business growth (36 per cent), and then digital transformation (29 per cent).
  • Private cloud is continuing to prove a popular choice. 29 per cent of IT leaders expect to move their workloads from on-premises to the private cloud this year, while nearly a quarter (24 per cent) expect to move from the public cloud to private. However, first time adoption of cloud services was evenly matched between private and public, with 15 per cent for each saying they will adopt that solution.

The sheer diversity of security concerns makes the challenge even harder

As IT teams work to keep businesses safe, a third of respondents (32 per cent) highlighted the growing complexity of cyber threats as the biggest strategic security challenge of 2019. Around one in five respondents believe that finding a cloud provider with enough security experience (18 per cent) is their biggest challenge for this year.

Looking more closely at specific risks, the most common concern among respondents was data loss (42 per cent), shortly followed by concerns about data in the cloud not being as rigorously protected (38 per cent). But that doesn’t show the full story and the wide breadth of concerns being faced; ransomware attacks (35 per cent), maintaining cyber defences on the budget provided (32 per cent), concerns that defences would not be adequate if tested (25 per cent), and worries caused by being targeting by cyber criminals last year (24 per cent) were also prominent.

Experienced cloud buyers look for flexible solutions

We are all aware of the impact of cloud services and technology, but as the market matures, it’s interesting to see how IT leaders are changing and refining their approach. Most (54 per cent) of respondents have between 21 per cent-50 per cent of their workloads in the cloud, but respondents were more likely to have less data in the cloud than more: 0-30 per cent cloud utilisation accounted for 32 per cent of respondents, while 70-100 per cent cloud utilisation accounted for just 10 per cent.

Private cloud is receiving more investment from mid-market businesses. A significant number of respondents are planning to move resources to the private cloud, with almost a third (29 per cent) expecting to move workloads from on-premises to the private cloud. In addition, a quarter (24 per cent) expect to move workloads from public cloud to private.

However, that’s not to say that public cloud is falling out to favour. 20 per cent plan to move workloads from on-premises to public cloud, and 18 per cent expect to move from private cloud to public cloud. There is also some data coming back on premises, mostly from private cloud (17 per cent), but also from public cloud (15 per cent).

First time adoption of cloud remains a significant factor across the research base. Equal percentages (15 per cent) plan to adopt the public or private cloud for the first time in 2019.

This helps explain why many mid-market organisations are actively adjusting cloud strategy to find the best execution venues for their workloads. Cloud was always meant to help businesses get more out of their IT budget, and many organisations are clearly proactive in pursuing that goal.

They are in a good position to do so. Not only do IT leaders have greater levels and experience in working with cloud tools, services and providers, but they are quite willing to shift workloads between on-premises, private and public clouds to refine their approach. It’s clear that ‘one size fits all’ is not a philosophy that many IT leaders believe in when defining how to spend their budget. Versatility and flexibility are key drivers of current and future cloud strategy.

While this data offers a largely positive view on the future of cloud in the mid-market, the range of security challenges and concerns facing IT leaders further underlines the unique nature of that risk. Working with partners who can satisfy this need for agile and dynamic cloud versatility is key to successfully balancing cost, performance, security and service.

Download the full report here: https://info.node4.co.uk/mid-market-report-2019

Paul Bryce, Chief Commercial Officer, Node4