3% IT budget increases fueled by AI, security, networking

IT budgets are seeing modest increases, according to recent survey data, with businesses looking to invest their IT dollars in artificial intelligence, data analytics, networking and more.

Avasant Research polled 371 organizations in the U.S. and Canada in the first half of 2024 for its annual Computer Economics IT Spending and Staffing Benchmarks 2024/2025 study. As a result, some 70% of respondents reported they plan to increase their IT budgets this year, a slight decrease from the 72% who reported that they had plans to increase budgets last year. On the average, IT budgets will increase by 3%, which is a slight downturn from 4% in 2023 and 5% in 2022, but this year’s figures fall in line with previous budget plans in 2020 and 2021, according to Avasant.

“Essentially, only companies in dire financial straits are likely to be cutting IT budgets. The importance of IT is seen in the strong budget growth of the last four years, despite constant uncertainty from pandemics, supply chain disruptions, and war,” the report reads.

How they plan to spend their IT dollar is also of note, with respondents indicating they will invest in technologies ranging from AI to data center automation, according to Avasant. More than 68% of companies report they plan to increase their IT spending on AI, as well as two infrastructure areas that power AI—the network and data analytics. Survey respondents shared their spending priorities by IT initiative:

• Artificial intelligence: 68%
• Data analytics/business intelligence: 68%
• Legacy systems: 57%
• Disaster recovery/business continuity: 48%
• Data center automation: 48%
• Blockchain: 44%
• Internet of Things: 42%
• Advanced networking: 41%
• Metaverse: 37%
• Virtual reality/augmented reality: 36%

Network budgets set to increase

Separately, Open Systems commissioned Osterman Research to survey 200 IT leaders in the U.S. about their priorities, challenges, and budgets related to SASE and network transformation. Open Systems’ 2025 IT infrastructure Report found that 71% of organizations are increasing their overall IT budgets over the next 12 months, with 79% reporting they would be increasing their cloud infrastructure budget. More than 70% also noted they would be increasing their network budgets, and 70% intend to increase their budgets around security, according to the report.

The report found that regulatory compliance, cloud adoption, and digital transformation initiatives are key drivers of networking investments. According to the Open Systems report, organizations planning to significantly increase their budget indicated the following drivers:

• An increase in IoT and IIoT devices on our network: 90%
• Supporting our larger digital transformation initiative: 93%
• An organizational shift toward cloud computing: 92%
• Increasing cybersecurity: 83%
• Improving bandwidth and performance: 75%
• Reducing costs or increasing cost efficiency: 87%
• Complying with standards and regulations: 88%
• An increased number of remote or hybrid workers: 67%

“Despite challenging economic times, organizations see the value of investing in IT needs, especially networking and security,” said Stefan Keller, Chief Product Officer, Open Systems, in a statement.