Changes in IT Spending: An Infrastructure Report

October 23, 2020


There’s a saying in Chicago: If you don’t like the weather, wait a minute. A pithy way of describing something that can change quickly, it could easily characterize the state of many things these days — including business operations.

When we last visited the subject of IT spending, in May, Gartner had predicted an eight percent decline year-over-year for 2020. That was far less sunny than its positive January forecast, which was published shortly before Covid-19 spread across the United States and forced budgetary constraints on companies of all sizes.

Now, only five months later, the future is looking rosier. According to various industry reports and experts, spending on everything from data centers and cloud services to SaaS and cybersecurity measures is on the rise through 2021 and likely beyond.

“During this rapid rush to remote work, IT departments everywhere rapidly deployed technologies to maintain business continuity during the global health crisis,” the newest State of IT report from Spiceworks Ziff Davis reads. “The massive move to work-from- home policies spurred shifts in hardware, software and services spend, and will continue to make waves as many companies stick to flexible working arrangements permanently.

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According to Gartner, spending on data center systems is expected to grow by six percent in 2021 — and remain on the upswing through 2024. “The priority for most companies in 2020 is keeping the lights on, so data center growth is generally being pushed back until the market enters the recovery period,” said Naveen Mishra, senior research director at Gartner. “Gartner expects larger enterprise data center sites to hit pause temporarily and then resume expansion plans later this year or early next. However, hyperscalers will continue with their global expansion plans due to continued investments in public cloud.”

Since just about every sector has adopted virtual technology in a big way, the demand for IT infrastructure products such as servers and storage has also gone up significantly, spurring a revenue increase of 34.4 percent year-over-year according to IDC. Spending on public and private cloud infrastructure increased too, IDC found, rising 47.8 percent and seven percent, respectively. It’s the first time in history that traditional non-cloud IT has taken a backseat budget-wise. The upward trend is expected to continue through 2023, with growth of at least five percent annually.

Amid an historic uptick in remote work, it’s no surprise that cybersecurity spending is on the ascent as well. And the highly trained professionals who understand how security contributes to business growth are effectively the rock stars of tech, demanding healthy salaries and often working remotely.


“[W]ith cyber risks increasing, companies will increasingly turn to outsourced or managed services to help keep their systems robust against attacks,” according to the 2020 Harvey Nash/KPMG CIO Survey that includes input from more than 4,200 IT leaders. Even while some large companies are eliminating on-site Chief Information Security Officers (CISOs), many other small- and medium-sized organizations are adding virtual CISOs to bolster security. As with other IT tools that are being more widely deployed, these specialists are increasingly viewed as a sound strategic investment rather than an expensive luxury. Learn more about Mindsight’s virtual CISO offering in our recent blog.

“The pandemic has had a significant economic impact on companies across the board,” says Eric White, Mindsight Chief Technology Officer and Solution Architecture Leader. “Despite IT budgets remaining flat or being reduced this year, the IT executives with whom I interact are expecting budgets to increase in 2021. These leaders are focused on building budgets around cloud and cybersecurity so they are better able to deal with rapid and unexpected changes in the future while still helping their organizations achieve growth.”

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About the Expert
Eric White is Chief Technology Officer and VP of Consulting Services at Mindsight. With over ten years of experience in information technology and leadership, Eric excels at implementing network and data center technologies, designing high-yield solutions for the business. Holding professional certifications from Microsoft, VMware, and EMC, as well as the Cisco CCNP, Eric is an expert at solving business realities with a client-centric focus that delivers.

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