IT Budget Allocations and Spending
Organizations of all sizes continue to consolidate their datacenters and squeeze value from existing IT infrastructure. However, despite these efforts and an overall drive to cut costs, critical IT infrastructure budgets for datacenter users are expected to change an average of 9% in 2018. This is down slightly from the 13% average in 2017.
Budgets for organizations with fewer than 1,000 employees expect to see a slightly higher change of 12% on average, but that number drops to just 7% for organizations with more than 1,000 employees. For companies with more than 10,000 employees, that number drops to just under 5%.
Drivers for Budget Increases. There is a strong focus on upgrading and refreshing existing infrastructure as well as accommodating general business growth for both small and large enterprises. However, when it comes to new business initiatives, nearly twice as many smaller organizations list that as a key driver compared with their larger counterparts.
Organizations that plan to increase their critical infrastructure budgets in 2018 more often cite keeping up with infrastructure demand as a pain point.
Drivers for Budget Decreases. Spending constraints and datacenter consolidation remain the key drivers behind decreases in critical infrastructure budgets, not a reduction in square footage or in business.
More than half of organizations that plan to decrease their critical infrastructure budget identified aging infrastructure as a pain point.
Colocation on the Rise
Datacenter owners are focusing heavily on optimizing their existing environments and consolidating their facilities – whether through adoption of newer, denser technologies or expanded migration to colocation sites.
Colocation is increasingly sought by organizations that continue to consolidate their datacenters either through site closure or though the decrease of space with existing sites.
The higher percentage of IT infrastructure that resides in a colocation environment, the higher probability that colocation serves a primary or core role in an organization’s overall datacenter strategy. Respondents that have at least 76% of their infrastructure in colocation consider colocation to be primary or core to their strategy.
Increasingly, datacenter providers will allow a firm to shift from leasing colocation space to using private cloud or other managed services under the same contract as the client’s strategy evolves.
As organizations transition to colocation, these vendors have an opportunity to become strategic partners. This process is made easier today through a range of interconnection services, which provide fast, seamless connections to public cloud providers.
Colocation Budget Changes. Overall budget changes are modest with an average change of about 9%. Changes in spending increases are slightly higher for smaller organizations, while spending decreases are higher for larger organizations.