IT budgets remain tight due to cloud migration

For the third straight year, IT organizations are keeping tight control over their IT budgets, but not because of economic uncertainty. Instead, the hesitancy to spend is because of the transition to the cloud.

That’s the findings from IT market research firm Computer Economics, which published the report Worldwide IT Spending and Staffing Outlook for 2018 (paywall), and it echoes a common finding that on-premises computing continues to fall out of favor as IT shops look to migrate as much work as possible to the public cloud.

“Typically, before the cloud transition, companies would grow IT budgets roughly to match expected revenue growth,” said David Wagner, vice president of research for Computer Economics in a statement. “This is no longer true in regions of higher cloud adoption, such as the U.S. and Canada, where IT budgets are not keeping pace with revenue growth.”

This is the first year where Computer Economics looked beyond the U.S. and Canada and into global spending patterns. It found there is greater growth in IT spending abroad, especially in Asia/Pacific, but that’s at least in part because they are not as far along as other world regions with the cloud transition. Google and Amazon are only just beginning to expand into China and are finding it slow going as they compete with many home-grown providers.

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