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October 11, 2010

44% of Asia Pacific Firms expect increase in IT budgets: Gartner

72% of these firms plan for 10% plus increase

By CBR Staff Writer

Forty-four per cent of organisations in Asia Pacific expect their IT budgets to increase in the next budget year, while 39% of organisations globally expect the same, according to a global survey by Gartner.

The Gartner study surveyed more than 1,500 IT leaders in 40 countries to understand general IT spending trends and spending on key IT initiatives.

Of Asia Pacific respondents expecting an increase, 72% plan for increases of more than 10%, and 36% expect more than 20% increase over the current year’s budget.

Gartner principal research analyst Derry Finkeldey said, following two years of tumultuous change and uncertainty, IT budgets will increase modestly in 2011; however, responses indicate that the ‘new normal’ is as much about where the money is going as how much is available.

"Asia Pacific was not as hard hit as other regions by the economic downturn and the region is resilient, currently experiencing a return to growth," Finkeldey said.

Gartner said that enterprise software implementations and upgrades are receiving the investment focus in Asia Pacific, with 85% of organisations allocating budget to implementations in the current budget year, with most planning to spend at the same or higher levels in 2011.

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The research house said that on an average, these organisations are investing around 23% of their IT budgets on initiatives in this area.
Interestingly, all respondents in Asia Pacific are investing in data centre consolidation or expansion initiatives in the current year.

The study revealed the IT budget distribution across spending lines is fairly consistent globally, especially for telecommunications services and external IT services, with IT personnel accounting for about 30%; data centre systems 24%; end-user equipment such as software and PCs 20%; telecom costs 14%; and IT services 13%.

External IT services accounted for 12.5% of the average IT budget globally. However, 20% of respondents in Asia Pacific have not allocated any IT budget to external IT services

The researcher said that twenty three percent of IT budgets in Asia Pacific are allocated to enterprise software initiatives, with 35% of budgets for new software licenses allocated to horizontal software.

83% of respondents are planning to spend on office and productivity software and 63% on CRM applications.

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