Annual spending by Canadian organizations on Information Technology (IT) operations and acquisitions will reach $10...
May 7, 2007
Annual spending by Canadian organizations on Information Technology (IT) operations and acquisitions will reach $100 billion in 2010, largely driven by acquisition spending on server and storage technology and software, a new study from Info-Tech Research Group’s Indaba Division reports.
Total IT spending by Canadian companies this year is expected to increase by 5.5% from $82.97 billion to $86.56 billion.
Investment in IT infrastructure and operations by four dominant sectors — business services, financial services, government and manufacturing — is alive and well in Canada and will drive IT spending at a compound annual growth rate (CAGR) of 4.9% annually through 2010, said Michael O’Neil, managing director, Info-Tech Research Group Indaba Division.
This kind of spending in key sectors is a healthy indicator for the Canadian economy and bodes well for IT storage equipment and software vendors.
Sales of servers, storage, and software will drive IT spending increases in 2007, the Info-Tech study indicates. But because these products are complex to deploy and manage, Info-Tech predicts they will spur greater growth in large accounts than in the small and medium business (SMB) market through to the end of the decade.
The idea that spending will grow faster in large enterprise accounts than in SMBs is contrary to conventional perspectives of the market, said O’Neil.
However, Info-Tech research has identified what we refer to as the ‘SAG factor’ — a Sophistication/Adoption Gap — that constrains IT adoption in the SMB market. Our research shows that businesses of all sizes are renewing expenditures on core technologies like PCs, printers, and low-end servers, but the more complex products driving IT automation projects are generally beyond the reach of SMBs.”
O’Neil explained SAG occurs with SMBs because vendors have not succeeded in engineering these products for easy deployment, and the skills needed to take advantage of their capabilities are not yet widespread in the SMB community.