Hardware Remains Top IT Spending Category

According to a global survey of 1,000+ IT professionals, computer hardware is still the top IT spending category, accounting for 30% of overall IT budgets. These are the headline findings from Spiceworks Ziff Davis’s (SWZD’s) latest Hardware Trends Report. The full report delves into IT spending and tech adoption plans across hardware, software, cloud, and managed services.

SWZD’s findings suggest that physical servers will continue to evolve and ultimately co-exist and integrate with public clouds in an increasingly hybrid world.

Key Hardware Findings: 

• AMD processor usage is poised to grow: Within two years, business adoption of AMD is expected to rise to 60% for PCs and 44% for servers.
• Storage acceleration trends continue: More than two-thirds (68%) of enterprises (500+ employees) plan to adopt all-flash storage arrays within the next two years.
• The cloud “pay-as-you-go” model is becoming more popular on-premises. More than half (57%) of enterprises expect to adopt consumption-based infrastructure by the end of 2023.
• Most (54%) businesses plan to use speedy NVMe storage technology in their on- premises servers by the end of 2023.
• Adoption of ARM server processors is poised to double from 11% of businesses currently to 22% within the next two years.

Cloud and Hardware Aren’t Mutually Exclusive 

This is SWZD’s core message – while overall cloud spending may be growing at the expense of hardware spend, the two aren’t mutually exclusive in a hybrid infrastructure. As the modern work environment continues to evolve, organisations allowing remote work are investing in technology to support a more flexible, hybrid infrastructure. SWZD’s research revealed a shift towards cloud (22% of overall IT budgets in 2020 to 26% in 2022) at the expense of hardware spending (33% of IT budgets in 2020 to 30% in 2022).

“Even with this shift, on-premises hardware continues to provide critical value. In a hybrid world, on-premises servers will increasingly integrate with cloud infrastructure, allowing organizations to migrate more easily and balance workloads, while increasing resilience.

Currently, 36% of organizations have integrated their on-premises infrastructure with a public cloud (also referred to as hybrid cloud). An additional 18% plan to implement this capability, meaning the majority of companies are expected to have hybrid cloud capabilities by the end of 2023.”

Our Analysis

These findings bolster the message that a hybrid approach is the way forward for most organisations; putting software and resources on-premises or in the cloud as is most appropriate for the workload in question.

We’ve recently seen double digit growth reported, again, by Amazon AWS, Microsoft Azure, and Google Cloud making it clear the market has plenty of room left to grow and must be a key focus area for ITAM and FinOps practitioners. That said, this report helps illustrate the concurrent message that on-premises hardware is here to stay for the foreseeable future – meaning organisations must be careful not to focus too heavily on cloud to the detriment of their existing, and even expanding, hardware footprint.

The growing focus on sustainability demands a Hardware Asset Management (HAM) focus – particularly at the end of the lifecycle at the point of IT Asset Disposition (ITAD) – to ensure devices are recycled/disposed of correctly and compliantly. Strong HAM & ITAD processes also contribute to an organisation’s data security and, with hardware purchases continuing apace, it is again critical that focus is not lost in this area.

Being able to manage a truly hybrid environment – one comprised of on-premises hardware & software, SaaS, and IaaS cloud – will be the marker of a mature ITAM function that is geared up for the future of business and information technology.