By Mark Henricks
Most IT budgets in the Asia-Pacific region are forecast to
be either stagnant or declining over the next year, according to a new report from Gartner.
Among those that are expected to grow, however, some of the anticipated
increases are robust. And, although most weren’t spending on cloud-based
initiatives, the trends eventually will result in more investment in cloud
computing, Gartner said.
The survey, "User Survey Analysis: Enterprise
Applications Versus the Cloud, 2010," polled more than 1,500 IT leaders in
40 countries worldwide. Surveyors found that 44 percent of Asia-Pacific budgets
were expected to increase in the next budget year. That was somewhat healthier
than the situation in the world at large, where 39 percent of organizations
looked forward to fatter IT budgets.
Of the Asia Pacific respondents that forecast an increase in
spending, 36 percent were looking for an increase of more than 20 percent over
the current year’s budget. And 72 percent of those anticipating growth expected
increases of more than 10 percent.
The investment plans reflected seeming lack of interest in
cloud computing, but the research firm said that was likely to change. For the
moment, 63 percent of Asia Pacific had not budgeted for any type of cloud
service in 2010. “However, 34 percent have allocated IT budget to cloud
computing as a key initiative for their organization and those that are
investing in cloud are planning high growth in spending in 2011,” Gartner
On the surface, the items organizations planned to spend on
looked similar to prior years. Eighty
-five percent of the organizations were allocating budget to
enterprise software implementations and upgrades, with most planning to spend
at the same or higher levels in 2011 as in 2010, Gartner said. The average
organization expected to invest around 23 percent of its IT budget on
implementing or upgrading enterprise software.
However, the research firm noted, this year all the
respondents in Asia Pacific were investing in data center consolidation or
expansion initiatives. Gartner said these investments in areas such as
virtualization were precursors to cloud initiatives. “We are seeing that the
money is now shifting from traditional IT budget categories to new types of
spending,” according to Derry Finkeldey, principal research analyst.
In other details, the report found 35 percent of budgets for
new software licenses were going to horizontal software. Eighty-three percent
planned spending on office and productivity software and 63 percent were
investing in CRM.
A significant regional difference was found when it came to
external IT services. Globally, average budgets allocated 12.5 percent to these
services. In Asian-Pacific 20 percent of respondents in Asia Pacific have not
allocated any IT budget to external IT services, Gartner said, calling the
finding an indication of market opportunity for service providers.
Another variation appeared when vertical software
implementations were examined. In Asia Pacific, 51 percent of enterprises that
cited enterprise application implementation as a key initiative were heavily
into vertical software implementation. That compares to the global mean of 37
percent. “A core driver for this are banks focusing on core banking applications
and manufacturers implementing computer-aided design, engineering and
manufacturing, as well as manufacturing execution systems,” Gartner said.
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