Analysis from Kable shows that the allocation of enterprise software budgets is reasonably equally split while hardware spending shows a much wider range of budget allocation.
While software licenses takes up the biggest split with 28%, the software vendors’ support and maintenance costs takes up 22.2% of the budget. Software as a Service isn’t far behind on 20.2% and Platform as a Service is only slightly behind that on 18%, with spending on other areas is 11.6%.
As companies such as Sage, Microsoft and SAP transition from the traditional legacy software model, the expenditure on support and maintenance costs could increase as SaaS usage also increases.
Comparatively, the budget expenditure split for hardware is over a much broader range, which is unsurprising given the wider range of areas that require spending.
Enterprise spending on clients is the largest portion of the budget taking up 16.4% with network and communications equipment the second largest at 14.4%.
High-end servers is the next highest budget allocation (13.1%) while allocation for security only comes in at 11.4%.
Servers’ allocation comes in at 10.9%, with peripherals 9.9%, storage 8.7%, processors 7.6% and Infrastructure as a Service allocation 7.4%.
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Interestingly, the allocation percentage of SaaS is much higher than IaaS, which could be related to the relative ease at which SaaS can be deployed. With IaaS many deployments are still dogged by a skills gap and some businesses remain fearful of losing control of their IT infrastructure.
The large allocations of budget which are given to telecommunications could reveal a conservative approach to changing this part of the business. With many businesses remaining attached to the tried and tested landline phones.
Diving down into the telecommunications budget reveals that the largest budget allocations are split between mobile voice 20.6% and fixed voice which is the same.
The allocation is also evenly allocated between data for wireless, for example 3G and WiFi (19.1%) and data for WAN, broadband and VoIP, meanwhile, the converged voice and data networks allocation is 17.1%, with spending on others just 3.3%.
Of the three categories, the software budget allocation suggests a greater willingness to innovate with new technologies, while hardware and telecommunications reveal reliance upon legacy with emerging technologies beginning to compete.
All figures come from Kable’s ICT Customer Insight survey, which polled 2685 respondents, from across the world in Q4 2014. The survey findings include data on hardware budget allocation, telecommunications budget allocation and software budget allocation. Subscribe to Kable here.
