ICT budget and staffing trends in the UK

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1 ICT budget and staffing trends in the UK Enterprise ICT investment plans to 2013 January 2013

2 TABLE OF CONTENTS 1 Trends in ICT budgets Introduction Survey demographics IT budget changes IT budget allocation by core technology area IT budget allocation by function... Error! Bookmark not 1.6 IT spending by entity IT staff distribution... Error! Bookmark not 2 Detailed IT budget allocations Introduction... Error! Bookmark not 2.2 Hardware budget breakdown Software budget breakdowns... Error! Bookmark not 2.4 Third party IT Services expenditure... Error! Bookmark not 2.5 Telecommunications budget... Error! Bookmark not 3 Summary... Error! Bookmark not 3.1 UK government s austerity drive will generate new ICT opportunities in the medium term... Error! Bookmark not 4 Appendix... Error! Bookmark not 4.1 Definitions Further reading... Error! Bookmark not 4.3 Contact the authors... Error! Bookmark not ICT budget and staffing trends in the UK / The id Factor Ltd / + 44 (0)

3 List of Figures Figure 1: UK enterprise ICT survey industry breakdown... 1 Figure 2: UK enterprise ICT survey breakdown by size band (number of employees)... 2 Figure 3: Recent and expected ICT budget changes among UK enterprises... 4 Figure 4: UK enterprises (external) ICT budget allocation in Figure 5: UK enterprises (external) ICT budget allocation in Error! Bookmark not Figure 6: UK enterprises ICT budget allocation by function, 2012 and 2013Error! Bookmark not Figure 7: UK enterprises IT budget allocation by entity in Figure 8: UK enterprises IT budget allocation by entity in Error! Bookmark not Figure 9: Average allocation of full-time IT staff members in UK enterpriseserror! Bookmark not Figure 10: UK enterprises average hardware budget allocation... 7 Figure 11: Average allocation of software budgets in the UK enterprise marketerror! Bookmark not Figure 12: UK enterprises average software budget allocation by technologyerror! Bookmark not Figure 13: UK enterprises average IT services budget allocation... Error! Bookmark not Figure 14: UK enterprises average IT consulting services budget allocationerror! Bookmark not Figure 15: UK enterprises average telecommunications budget allocationerror! Bookmark not List of Tables Table 1: UK enterprise ICT survey industry breakdown... 2 Table 2: UK enterprise ICT survey breakdown by size band (number of employees)error! not Bookmark Table 3: Recent and expected ICT budget changes among UK enterprises... 4 Table 4: UK enterprises (external) ICT budget allocation in Table 5: UK enterprises (external) ICT budget allocation in Error! Bookmark not Table 6: UK enterprises ICT budget allocation by function, 2012 and 2013Error! Bookmark not Table 7: UK enterprises IT budget allocation by entity in Table 8: UK enterprises IT budget allocation by entity in Error! Bookmark not Table 9: Average allocation of full-time IT staff members in UK enterpriseserror! Bookmark not Table 10: UK enterprises average hardware budget allocation... 8 Table 11: Average allocation of software budgets in the UK enterprise marketerror! Bookmark not Table 12: UK enterprises average software budget allocation by technologyerror! Bookmark not Table 13: UK enterprises average IT services budget allocation... Error! Bookmark not ICT budget and staffing trends in the UK / The id Factor Ltd / + 44 (0)

4 Table 14: UK enterprises average IT consulting services budget allocationerror! Bookmark not Table 15: UK enterprises average telecommunications budget allocation. Error! Bookmark not ICT budget and staffing trends in the UK / The id Factor Ltd / + 44 (0)

5 1 Trends in ICT budgets 1.1 Introduction This report presents the findings from a survey of UK enterprises regarding their Information & Communication Technology (ICT) budgets and staff allocation. The survey investigates how UK enterprises currently allocate their ICT budgets across the core areas of enterprise ICT spend, namely hardware, software, IT services, communications and consulting. The report also illustrates with whom UK enterprises prefer to invest their ICT Pounds, thereby providing visibility into the opportunities for ICT vendors and service providers. Trends in ICT spending are identified through to the end of 2013 following feedback from respondents on their forthcoming investment plans. The survey was conducted in September 2012 via an online methodology, with respondents all having ICT decision maker responsibility (typically CIOs and IT Managers). Kable plans to repeat the survey in the second half of 2013, in order to monitor ICT budget changes on an ongoing basis. 1.2 Survey demographics Figure 1: UK enterprise ICT survey industry breakdown ICT budget and staffing trends in the UK P a g e 1 / The id Factor Ltd / + 44 (0)

6 Table 1: UK enterprise ICT survey industry breakdown Industry Count Percentage of respondents Financial markets % Utilities % Education % Retail % Manufacturing % Insurance % Government % Healthcare % Energy % Media % Retail banking % Pharmaceuticals % Total % Figure 2: UK enterprise ICT survey breakdown by size band (number of employees) ICT budget and staffing trends in the UK P a g e 2 / The id Factor Ltd / + 44 (0)

7 Table 2: UK enterprise ICT survey breakdown by size band (number of employees) Employee size band Count Percentage of respondents Over % % % % % % % Total % ICT budget and staffing trends in the UK P a g e 3 / The id Factor Ltd / + 44 (0)

8 1.3 IT budget changes Figure 3: Recent and expected ICT budget changes among UK enterprises Table 3: Recent and expected ICT budget changes among UK enterprises Trend (Count) (%) expectation (Count) expectation (%) Decrease more than 6% % % Decrease slightly (1%- 5%) % % Flat (0%) % % Increase slightly (1-5%) % % Increase significantly (6%+) % % Total % % Despite the uncertain economic conditions... (Summary of the situation in the enterprise ICT market and discussion around the degree to which IT budgets are decreasing/increasing/staying flat.) ICT budget and staffing trends in the UK P a g e 4 / The id Factor Ltd / + 44 (0)

9 1.4 IT budget allocation by core technology area Figure 4: UK enterprises (external) ICT budget allocation in 2012 Table 4: UK enterprises (external) ICT budget allocation in 2012 Category Average budget in 2012 (%) Hardware Software Services Communications Consulting Other Total Kable s survey suggests that UK enterprises are allocating a major portion of their IT budgets on (A brief description of the way in which enterprises are allocating their IT budgets.). ICT budget and staffing trends in the UK P a g e 5 / The id Factor Ltd / + 44 (0)

10 1.6 IT spending by entity Figure 5: UK enterprises IT budget allocation by entity in 2012 Table 5: UK enterprises IT budget allocation by entity in 2012 Entity Average budget in 2012 (%) Internal development and maintenance Technology (product) vendor Telco Systems integrator Local resellers of technology products Specialist outsourcer Total It is noteworthy that UK enterprises are allocating... (An analysis of the degree to which enterprises are focussing on in-house IT investment, as well as how much they are willing to spend with third parties. Of the money spent with third parties, commentary on how this breaks down by provider type). ICT budget and staffing trends in the UK P a g e 6 / The id Factor Ltd / + 44 (0)

11 2 Detailed IT budget allocations 2.1 Introduction This section of the report focuses on the detailed IT budget breakdowns for hardware, software, IT services, communications and consulting. 2.2 Hardware budget breakdown Figure 6: UK enterprises average hardware budget allocation ICT budget and staffing trends in the UK P a g e 7 / The id Factor Ltd / + 44 (0)

12 Table 6: UK enterprises average hardware budget allocation IT function Average budget (%) Clients Network and communications equipment Mainframes Servers Security Peripherals Storage Semiconductors and Processors Total Kable s recent survey finds that almost one third of the hardware spend is on... (A brief description on where the investments are being made and what the implications are for hardware vendors.) 3 Appendix 3.1 Definitions Core areas of enterprise IT spending Hardware - includes computer hardware, devices and peripherals e.g. printers, semiconductors, servers and mainframes, storage, telephony infrastructure, data/network infrastructure. Software - includes enterprise applications & Enterprise Resource Planning, software infrastructure (e.g. operating systems, systems management) and information management (e.g. Business Intelligence, content management). Services - includes spending on third party IT services e.g. Application Services, Business Process Outsourcing Services & Infrastructure Services. Communications - relates to all telecommunications costs in the enterprise. This would include both voice and data communications costs (fixed-line telephony, Managed Services, connectivity etc.) as well as mobile telephony and data costs. Consulting - covers professional services spending with third parties e.g. Business and Strategy consulting, IT staff contracting and Technology & Transformation consulting. Other - any other areas not included above, where the external IT budget is spent. IT budget by function ICT budget and staffing trends in the UK P a g e 8 / The id Factor Ltd / + 44 (0)

13 Data centre enterprises investment in facilities (in-house and from third parties) providing a secure environment for its computer systems and associated components, including servers & mainframes, telecommunications and data storage systems. Service Desk expenditure on the provision of desktop services that manage an enterprise s desktop environment and distributed IT assets. End-user Computing expenditure on end-user computing equipment, including the likes of desktops, laptops and mobile devices. Network investment made in enterprises network infrastructure, including its wide area network (WAN) and local area network (LAN). Applications expenditure on enterprise software and applications either deployed on-premise or supported remotely and delivered as a service. Communications as above, the costs associated with telecommunications in the enterprise, including voice and data communications over fixed and wireless networks. Management expenditure on the enterprise-wide administration of distributed computing systems, including both systems management and network management. Hardware budget Clients covers end user computing devices, including the likes of personal computers and workstations. Mainframes high-end computers used by corporations and governments for critical applications, bulk data processing, and transaction processing. Network and Communications equipment enterprise IT infrastructure for networking and communications covering the likes of hubs, switches, routers, access points and customer premise equipment. Peripherals covers additional computing devices including printers, phones and adaptors, and scanning and imaging devices. Security covers security hardware and appliances including content-filtering and anti-spam appliances, encryption/ssl accelerators, firewall and VPN gateways, smart card readers, and smart cards. Semiconductors and Processors expenditure on computer chips and processing units. Servers investment made in mid-range and low-end server systems. High-end servers are included in the mainframe category. Storage IT storage infrastructure includes hard-disk drives, NAS filers and gateways, SAN adaptors and connectors, SAN disk arrays, and tape libraries. Software budget ICT budget and staffing trends in the UK P a g e 9 / The id Factor Ltd / + 44 (0)

14 Application Lifecycle covers Application Development, Application Testing, Architecture and Modelling, Change and Configuration Management, Development Methodologies, Project and Portfolio Management, Requirements Management. Enterprise Applications covers Business Process Management, Commerce Applications, Customer Relationship Management (CRM), Enterprise Resource Planning, Financial Applications, Human Resources and Payroll, Product Lifecycle Management, Supply Chain Management. Information Management covers Business Intelligence, Collaboration and Knowledge Management, Content Management, Data Management, Portals, Search. Integration and SOA covers Application Integration, Data Integration, Legacy Renewal, Middleware, SOA. IT Management Software covers Application Performance Management, Desktop Management, IT Service Management, Network Management, Systems Management. Security covers Application Security, Business Protection, Communication Security, Content and Web Filtering, End-point Security, Identity and Access Management, Information Protection, Network Security, Security Audit and Testing, Security Management. Software Infrastructure covers Application Platforms, Databases, and Communication Servers, Mobile Platforms, Operating Systems, Storage Management, Virtualization. IT Services budget Application development & integration service expenditure relating to the development of enterprise applications, including the customisation, rationalisation or modernisation of off-the shelf packages, as well as the development of bespoke applications. Integration services cover the planning, design, and building of enterprise applications which automate business processes. Hosting & data centre services Hosting & data centre services include the management and monitoring of an enterprise s entire IT platform. As well as covering normal servers, it includes the associated network infrastructure, storage infrastructure, security and systems management software. Security & privacy services Security and privacy services help enterprises protect their IT assets and comply with an increasingly regulated environment. Examples include Threat & Vulnerability Management Services, IT Security Management Services, IT Security Compliance Services, Secure Communications Services and Secure Content Services. Desktop services & user support Desktop services cover the management of an enterprise s entire desktop environment and distributed IT assets. User support services give an enterprise s IT users a single point of contact for IT issues in the desktop environment. IT consultants & contractors expenditure on third party IT consultants and contractors to undertake IT systems design and implementation projects. Cloud Services expenditure on services made available to enterprises via the Internet from a service provider s data centre. This category excludes the allocated cost of the software licence related to such services. ICT budget and staffing trends in the UK P a g e 10 / The id Factor Ltd / + 44 (0)

15 IT Consulting budget Systems planning & design consulting expenditure with IT services providers relating to both the re-design and overhaul of IT systems, as well as the planning phase relating to IT systems integrations. Disaster recovery & business continuity planning services that help enterprises ensure the continued availability of mission-critical processes and IT resources against potential loss or damage caused by disruptions, disasters or IT security breaches. Training, education and other consulting investment made with IT consultants to provide training and education services to enterprise s in-house IT staff. Telecommunications budget Fixed voice expenditure on fixed-line communications for voice services, including line rental and call charges. VoIP services are excluded, as well as charges for calls routed within the same WAN. Mobile voice enterprise expenditure on mobile voice telephony services, including monthly subscription costs and voice minutes. Converged voice & data networks expenditure on services that combine voice and data functionality over one network, including voice over IP, MPLS VPN networks, and IP VPN networks (with metered or unmetered voice). Wireless data enterprise expenditure on services that involve the transfer of data over wireless networks, including third generation (3G) mobile telecommunications and WiFi. Data expenditure on fixed data services including internet connectivity, leased lines, WAN connectivity and other managed data services such as ATM and Frame Relay. ICT budget and staffing trends in the UK P a g e 11 / The id Factor Ltd / + 44 (0)

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