Let us look into the Enterprise Computing / Digital Spend Now and its forecast in 2020.
Enterprise technology is a $3.4tn industry (of which, $1.4tn in telco-based services, $1.2tn in software & IT services and the rest in hardware). While enterprises therefore spend heavily on tech - this equates to about 3% of GDP. Over 70% is deployed for technology maintenance, or to ?keep the show running?; leaving only around $0.6tn for innovation. We believe one of the over-arching themes within the sector is how the industry is gradually improving this mix, with savings within the "Run part of IT redeployed into Build" or innovation.
Server virtualisation provided one major step forward for the industry in looking to lower infrastructure IT costs. Cloud computing is another step. At its heart, cloud allows a potentially significant lowering of IT running costs, as management of infrastructure workloads is automated.
The ability to increase fixed asset utilisation (IT hardware such as servers and routers), and automate certain maintenance functions has freed up CTO?s budgets. A drive to innovate means that these savings are being deployed to software.
