IT spending growth slows, as remote work proliferates

Overall IT spending growth will slow slightly in the second quarter of this year, even as tech hiring hits record levels, according to a new survey of IT decision-makers released by Enterprise Technology Research (ETR).

The latest iteration of ETR’s Technology Spending Intentions Survey (TSIS), which is issued quarterly, said that hiring demand for IT workers is at the highest levels ever reported. The TSIS report said that its findings tally closely with data from the US Bureau of Labor Statistics, which said that the US market will add 667,600 IT jobs between 2020 and 2030 — a 13% annual rate of growth.

Yet overall IT spending for the second quarter of the year will grow more slowly than previous predictions, the report said, with the 1,200 IT decision-makers surveyed placing that number at 5.5% growth, rather than the 6.8% seen in the previous report. That pushes total IT spending projections down to 6.7% growth year-on-year, compared to 8.3% in the last report. Seventy-seven percent of the respondents were from the US, and 14% were from EMEA (Europe, Middle East, and Africa.)

Security, networking are IT spending priorities

That number still represents plenty of ongoing growth for the IT sector, and much of it is being driven by the shift to remote work and the consequent demand for more effective cybersecurity measures and networking technology. Cybersecurity remained the obvious top priority for most respondents in the latest report, but the sharpest growth in prioritization was seen in networking. Other areas rated highly important included cloud migration and analytics/data warehousing.

The TSIS report also said that 42% of IT employees were working remotely on a full-time basis, 31% were splitting time between remote work and the office, and 27% were back on-site. The proportion of IT staff working from home is expected to shrink slightly over time, however, as pandemic concerns slowly ease and more workers return to the office on either a full- or part-time basis.

That emphasis on remote work has prompted a new prioritization of networking equipment and a consequent stiffening of demand, with which supply has not been fully able to keep pace. More than half of the latest survey’s respondents reported moderate to severe difficulties in acquiring networking gear.

ETR chief strategist Erik Bradley said in a statement accompanying the report that the recent spike in the number of cyberattacks, coupled with their targeting of remote workers, is the prime mover behind a lot of IT spending decisions recently.

“Cybersecurity continues to be cited as the highest priority since the pandemic, with ransomware attacks alone up 150% in 2021, and 61% of malware is targeting remote workers,” he said. “The massive proliferation in attacks and the need to support remote workers has created new security concerns which partially account for the increased focus on security. We also are starting to see work-from-home numbers stabilize, which may account for the rise in network spending.”