Nearshore Americas

Will Security Spending Come at the Expense of Cloud Services in 2016?

Twenty-one percent of IT managers will invest a portion of their budgets in advanced security solutions, a strong suggestion that industry decision makers perceive greater risk from security attacks. This is a key takeaway from a survey published by Spiceworks, a collaborative software management company based in Austin, Texas.

The expected increase in spending outpaces that going toward cloud transition, especially Software as a Service. Given that advanced security and SaaS each accounts for the same 34% of IT budgets at firms this year, the relatively higher rate of spending begs the question: Do IT pros see security as a more pressing need than cloud transition over the next year?

Behind the Data

On the surface, it isn’t clear that security concerns are at the fore of people’s minds, and responses to the security questions are a mixed bag of concern and indifference.

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However, Spiceworks projects overall IT budgets will be flat next year, and given that advanced security and SaaS each accounts for the same of IT budgets this year, 34%, an increase in spending in one area must come at the expense of another area. And hence from 34%, IT pros expect to spend 21% next year on advanced security, as opposed to only 10% growth for SaaS.

To be clear, the Spiceworks survey covers North America and Europe, the Middle East and Africa. But even though this presumably leaves out Latin America (it isn’t clear if Mexico is considered part of North America for the purposes of this survey), the data still pertains in general because the region functions as a trend follower when it comes to headline tech spending and adoption of tech trends.

Our Take

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As rival demands compete for the attention of IT managers, expect many firms to adopt a conservative tack. This may mean prioritizing investment in advanced security, leaving the cloud transition to unfold as current systems near their end-of-life cycle.

Of course, efficiency and higher revenue may be sacrificed as a result, but for many firms describing the potential benefits of aaS is an exercise in forecasting dynamic gains that are still largely conceptual, which offers a hazier vision than tallying the costs of security attacks. Over the next few years, this will be one of the defining challenges for many tech firms, the trade-off between the cost of digital transformation and data security.

Sean Goforth

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