Info-Tech Research on Monday projected an increase in Canadian IT spending that was slightly higher than that forecast by rival IDC Canada earlier this year.
Server, storage and software investments will drive an overall jump of about 5.5 per cent in Canada this year, according to London, Ont.-based Info-Tech. This will lead to an overall boost in IT spending from $82.97 billion to $86.56 billion, with longer-term growth of more than $100 billion expected by the end of the decade.
Info-Tech Research Group managing director Michael O’Neil said the difference was due to the fact that IDC bases its forecast on information reported by vendors, whereas Info-Tech conduced surveys with 11,000 responses. O’Neil is a former country manager of IDC Canada.
“It’s a different perspective on the market,” he said. “Most of the forecasts you would have seen . . . are based primarily on supply-side imput.”
O’Neil said financial and other industry-specific applications were fuelling the surge in software spending, rather than horizontal segments such as customer relationship management or enterprise resource planning. Many enterprises that initially deployed software to automate tasks or bring together diverse pockets of information are also preparing to see the “next generation of payback,” O’Neil added, as turnover in management brings in more technology-savvy users.
“If you look at the trends around people in upper to senior management, you have people who were younger move into those more powerful roles,” he said. “They have an innate understanding of how information can help them.”
IDC Canada country manager Vito Mabrucco echoed that theme in an earlier Webcast, suggesting that increased sophistication with IT systems means users won’t necessarily take what’s handed to them.
“We’re seeing a stronger shift towards end users deciding what they will acquire and how they will do it,” he said.
IDC had also predicted virtualization and management software having a big impact on infrastructure spending strategies, something that Info-Tech picked up on as well.
“Virtualization has an impact on our longer-term server forecast,” he admitted. “We don’t think the same pattern is going to play out with storage. People are going to continue to find more things to store, even if you can increase utilization rates.”
Info-Tech’s forecast is tempered by what it calls the “sophistication/adoption gap,” or SAG, in the small-to-medium business sector. These firms won’t necessarily embrace the same level of IT adoption as their larger peers, O’Neil said.
“The froth on the growth rate – middleware, apps like BI – a lot of that stuff is still not simple enough to use for small businesses. SAN are not simple to use as network-attached storage,” he said. “The skills required to appreciate how that matters in terms of generating business payback aren’t widespread.”
A similar SAG exists vis-à-vis Canadian and U.S. enterprises, O’Neil added, which explains why Canadian firms “aren’t showing the same level of enthusiasm” about some middleware and service-oriented architecture technology products and tools.