What is IT Spending?
IT spending refers to both capital expenditure (CapEx) and operational expenditure (OpEx), encompassing software, hardware, licenses, and services.
Trend #1: Embracing the Cloud & SaaS
In 2017, all segments of IT spending experienced growth. Notably, data centers saw an increase due to rising costs of memory chips, rather than a surge in server or data center growth. However, there is still a significant push towards the cloud, with a ~35% increase in cloud adoption over the past year. This shift is reflected in the projected negative growth for Data Center Systems in 2018.
The move towards the cloud does not hinder the software category’s growth. More companies are turning to Software-Defined Data Centers and experiencing an uptick in Software as a Service (SaaS) sales. While traditional software licensing spend remains flat or slightly declining, SaaS-model software sales continue to trend upwards.
Trend #2: AI’s Ubiquitous Rise
If 2017 was not the year of AI, then surely 2018 will be. Giants like Amazon, Google, and Microsoft are making AI accessible to all by providing user-friendly frameworks and platforms. Instead of upfront investments, developers can now leverage services such as Google’s Cloud AutoML to create AI-based image recognition tools simply through drag-and-drop interfaces. This user-friendly approach to AI, known as Codeless AI or AI-as-a-Service, democratizes the technology.
Cloud-based microservices not only facilitate software connections to AI frameworks, like Tensorflow, but also pave the way for AI algorithms embedded in IoT devices, potentially revolutionizing wearable technology.
The pay-as-you-go model of democratized AI encourages widespread adoption by companies that would otherwise not delve into AI ventures.
Trend #3: Blockchain Enters the Enterprise
Blockchain technology is moving beyond its cryptocurrency roots and is expected to drive IT spending in 2018. According to researchers at Markets & Markets, the market for blockchain-related products and services will reach $7.7 billion by 2022, a significant jump from $242 million in the previous year. Additionally, Bloomberg reports claim that Blockchain will be one of the largest consumers of data center capacity in 2018, with IBM alone renting out approximately 60 data centers worldwide.
While blockchain in the enterprise is still in its early stages, there are vast opportunities for private blockchains. Major projects involve collaborations between separate companies and industries, like a consortium of banks working together on a shared ledger. Furthermore, private blockchains within organizations can offer privacy, security, and decentralized protection for record-keeping tasks.
By keeping an eye on these three key trends, businesses can make informed decisions about their IT spending in 2018.
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