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The new essentials: IT budgets

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(Image credit: Photo by John Schnobrich on Unsplash)

When the pandemic changed work as we know it, IT spending fundamentally changed as well. As organizations continue balancing their remote and in-person workforce, it is up to IT leaders to rethink their company’s approach to infrastructure and spending. 

Cloud investments grew significantly in 2020 due to the new reality of virtual connections, and many experts believe cloud spending will only continue to grow going forward via such markets as the best cloud storage and best cloud hosting. At the same time, the remote workforce highlighted many enterprises’ lack of secure, remote security systems, and networks. 

Now more than ever, IT teams need to focus on creating IT budgets that take into account the need for new essential initiatives.

The rise of cloud investment

Cloud investments have risen steadily over the last decade. Prior to the pandemic, 2020 was already a milestone year for the cloud, as the BVP Nasdaq Emerging Cloud Index market cap crossed $1 trillion (opens in new tab) that February, and aggregate SaaS and IaaS revenue both topped $100 billion.

When remote work accelerated in 2020, cloud investments kept growing as more workers than ever collaborate and access private data and information virtually. As shelter-in-place and quarantining have led to a new remote work normal, cloud software services had a record 2020 - Zoom's stock was up 293 percent over the summer, and AWS and Microsoft Azure had strong summer outings.

The pandemic accelerated what was widely understood: most companies are realizing that it’s essential to update operations and technology to best equip the modern workforce. As companies manage and distribute private data across networks, it’s important to invest in a cloud service that will distribute data safely and effectively. 

Having the ability to access the cloud - and your data - from anywhere should be reason enough, but having cloud services that will securely store and distribute your information is essential in today’s remote world. But how much cloud investment is too much investment?

The corporate shift to the cloud because of remote work also accelerated the amount companies spent on cloud infrastructure services. In 2019, businesses spent an estimated $96.4bn on cloud infrastructure services, surpassing their in-house data center hardware and software spending for the first time. 

IT leaders believe that companies spent the equivalent of around $15 billion extra a week on technology during the first few months of remote work to enable safe and secure home working. To avoid bill shock, I recommend companies and financial departments take the time to understand their contracts with cloud service providers - they may not look the same as they did last year. 

I recommend talking to your cloud provider about ways to contain costs, but also preparing budgets for cloud investments in the new year.

Prioritize security

When most companies moved to remote work in March, it became clear that many did not have a robust security plan to protect their data. Malicious activity has seen a massive spike, with hackers across the world breaking into stressed IT systems that were not built to withstand so many network log-ins. 

While the pandemic is heightening the need for shared cloud environments, migration to the cloud can also increase risk. As such, cloud migration introduces the need for vulnerability assessments and management. 

According to Trustwave, cloud services have become the third-most targeted environment by cybercriminals (opens in new tab), accounting for 20 percent of investigated incidents in 2019, up from seven percent in 2018. Cyber resilience is thus top of mind for enterprises as they bring this technology, which is susceptible to attack, into the fold.

It's important for businesses to implement proper cloud security to prevent a potential organizational breach. Unfortunately, the pandemic served as a wake-up call for many IT teams who learned - the hard way - that a remote security strategy is prudent. Now, security has become many CIO’s top priority. In fact, in a survey conducted by Information Week, 47 percent of IT leaders said that security and privacy is the most important technology investment (opens in new tab) for their teams in 2021 and beyond.

One of the easiest and most cost-effective ways to prioritize security is to keep your IT teams educated, well-prepared, and focused. Help them by adding yearly or biannual training sessions - sharing threat knowledge and providing tips and tricks for how to thwart potential attacks. 

Doubling down on security also entails incorporating privacy impact assessments in your organizational structure, using Computer Information Systems (CIS) hardening guidelines for your servers and infrastructure, and bringing in tools that help your organization think smarter, not harder, about security.

It’s also important to invest in VPNs, VDI solutions, and privileged user jump hosts. As employees work from at-home WiFi networks, it has become key to ensure they are actively connected to a corporate VPN when accessing the cloud to eliminate any risk from potentially unsecured systems. 

Remember that most employees did not set up their at-home WiFi networks with the knowledge that they would be utilizing it for more than personal usage. While the networks are secure, they are certainly not set up to host, protect, and secure the organization’s data. This is why the best VPN services for corporations are essential, and recommended to every IT team looking to secure their organization’s data assets.

De-prioritize non-essential initiatives

With security and cloud taking precedent, it’s important for IT teams to re-evaluate the long term plans they may have previously set for the coming years. While every company’s individual priorities will be different, organizations should take a firm look at their upcoming IT budget to ensure efficient and secure remote work takes precedence over other activities that may be less pressing. 

While it may be difficult for IT teams to only focus budget on secure remote work, organizations need to make sure to move as many non-essential initiatives as possible to 2022 or beyond. They can wait but secure systems cannot.

While the pandemic has certainly been unprecedented, it’s created a new IT reality around flexibility and resilience. Being flexible amidst future disruption is critically important and will make sure that data, assets and personal information is not able to be compromised. 

No one can predict what this year or beyond will look like, but with an updated IT budget and investments in place, organizations will be ready for any challenge or crisis that comes up.

Mike Fuhrman is Flexential's Chief Operating Officer, Cloud & Managed Services, leading its cloud and managed services business focusing on end-to-end technology solutions for our customers’ most critical workloads. Under his leadership, the company has launched several new or enhanced cloud products to provide more hybrid IT options to a broader set of customers.