Big business will ‘upgrade, not innovate’ in 2010

More than half of all IT software spending in 2010 will be directed towards upgrading and maintaining existing applications, a new report from Forrester Research predicts, as enterprise organisations delay plans to adopt new technologies such as cloud computing.

Statistics published by the market watcher show that 52% of enterprises and 18% of small to medium-sized businesses aim to spend their IT budgets on upgrading industry-specific software during the year, while 48% of enterprises and 18% of SMBs intend to do likewise on customer relationship management (CRM) platforms.

The investigation, which canvassed 2,200 IT executives and decision makers across Europe and North America, also showed that about a third of all enterprises had already adopted, or were planning to adopt, software-as-a-service (SaaS) at some point in 2010. Despite this, Forrester claims that vendors are not putting forward a clear case for cutting edge technologies such as cloud computing and infrastructure-as-a-service.

"Despite all the hype around new technologies that hit the market in the past few years, firms are devoting most of their IT spending on already-installed technologies," commented Holger Kisker, senior analyst at Forrester. "As long as businesses are prioritising cost-cutting and efficiency improvements, tech vendors must provide clearer business justifications for their offerings and demonstrate the functional fit with business requirements that their solutions provide."

Earlier this year, industry analyst Gartner forecast that by 2010, a fifth of all enterprises would own no IT infrastructure whatsoever as cloud computing and mobile working practices become more commonplace.

Peter Done

Peter Done is managing director of Peninsula Business Services, the personnel and employment law consultancy he set up having already built a successful betting shop business.

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