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In The State of IT Spend in 2024: How Does Your Organization Compare?, we shared Aberdeen’s analysis of IT spending using a standards-based taxonomy of 8 high-level categories and 84 specific areas, based on the data gathered in the Spiceworks Ziff Davis State of IT 2024 report.
To recap, here are the ranges (from 5th percentile to 95th percentile) and medians (50th percentile) for each of the eight high-level IT spending categories — keeping in mind that for each respondent, the total across all areas adds up to 100%:
The State of IT Spend in 2024: 8 High-Level Categories
|
1.5% to 46.5% (median: 17.5%) |
|
1.5% to 47.0% (median: 17.8%) |
|
1.0% to 30.0% (median: 10.8%) |
|
0.6% to 23.0% (median: 7.4%) |
|
0.7% to 18.8% (median: 7.5%) |
|
0.7% to 18.6% (median: 7.7%) |
|
1.0% to 35.0% (median: 11.2%) |
|
0.5% to 19.0% (median: 5.6%) |
Source: Adapted from the Spiceworks Ziff Davis State of IT 2024 report; Aberdeen, January 2024.
It’s also important to remember that there’s no right answer for how much your organization should spend in any particular area. Each organization’s strategic initiatives are reflected in its resource allocation decisions — or, said another way, the technology professionals and senior leadership in every organization must make their own respective choices and tradeoffs.
As an illustrative example of how resource allocation decisions for 2024 reflect current IT strategies, let’s take a closer look at computing infrastructure and IT staffing. As a basic, coarse-grained comparison, consider the percentage of annual Total IT Spend allocated to the categories:
- Computing Infrastructure (Hardware, Software, Facilities) and IT Labor — collectively, refer to these as “In-House”.
- Hosted / Cloud-based Services and Managed Services = collectively, refer to these as “Outsourced”.
The full distribution of responses based on these groupings is shown in Figure 1 below.
Figure 1: The State of IT Spend in 2024 — Computing Infrastructure and Technical Staffing
Source: Adapted from Spiceworks Ziff Davis State of IT 2024 report; Aberdeen, January 2024.
See More: The State of AI in the Enterprise 2023: How is AI Actually Affecting Jobs?
Some interesting insights from this analysis include:
- Less than 5% of all respondents in the State of IT 2024 dataset have gone “all-in” on either in-house or outsourced strategies for computing infrastructure (hardware, software, facilities) and technical staffing — i.e., more than 95% of organizations are currently investing their IT resources in a blended approach.
- For the In-House strategy, the median annual Total IT Spend percentage is about 60%.
- For the Outsourced strategy, the median annual Total IT Spend percentage is about 20%.
- For 2024, the median ratio of total IT budgets that organizations have allocated to Outsourced vs. In-House categories is approaching 40%.
Overall, this simple analysis highlights the undeniable and increasing impact of cloud-based IT strategies — but at the same time, it underscores the ongoing importance of in-house capabilities. High-tech marketing messages can sometimes position “the cloud” as a fait accompli, but the empirical data tells a more balanced story for now.
In the next blog of this series, I’ll share a second illustrative example of how an organization’s strategic initiatives are reflected in its resource allocation decisions — and in an area where quantitative insights on spending are sorely needed: cybersecurity as a percentage of computing infrastructure. I hope you’ll find it interesting and useful!
How can organizations approach IT Spend, especially in terms of computing infrastructure and technical staffing? Join us for an insightful discussion on The State of IT Spend in 2024: Managing Choices and Tradeoffs in a webinar. We’d love to hear from you!
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Wanda Parisien is a computing expert who navigates the vast landscape of hardware and software. With a focus on computer technology, software development, and industry trends, Wanda delivers informative content, tutorials, and analyses to keep readers updated on the latest in the world of computing.
