The 2023 State of IT: The Economy Won't Slow Us Down

pcmag.com:

This year's State of IT(Opens in a new window) report from PCMag's sister site Spiceworks Ziff Davis(Opens in a new window) (SWZD) once again gives a peek into projected IT spending patterns in the coming year. And while the overall economic forecast for 2023 looks grim, that doesn't mean companies will be cutting back on their IT budgets. In fact, most are planning to increase them.

According to the report, 60% of enterprises in North America and Europe are preparing for an economic downturn. By comparison, just 45% of small and midsized businesses (SMBs) are battening down the hatches, perhaps due to greater risk tolerance among early-stage ventures.

Europe, in particular, is bracing for impact, with fully 65% of all European companies preparing for a recession. Only 41% of North American companies are doing the same.

Those austerity measures come in a variety of forms. Reducing non-essential spending and re-evaluating existing vendors or contracts were both popular choices. And putting the brakes on hiring and even workforce reduction are both on the table.

Surprisingly, however, this belt-tightening doesn't look like it will impact IT spending significantly. Of the companies surveyed, 51% said they planned to increase their IT budgets, year-on-year. And while that's only about half of them, consider that only 6% said they planned to reduce their budgets. The rest plan to spend about the same as the previous year.

There's one obvious reason why spending might increase: inflation. With energy costs soaring, particularly in Europe, the price of virtually every aspect of IT will go up.

But according to SWZD's analysis, inflation is only a secondary driver of IT budget increases. The primary driver is the recognition that