IT Spending In 2010 Focusing On Software Maintenance And Upgrades: Report

More than half of IT software budgets in 2010 will be spent on ongoing operations and maintenance of existing applications, rather than implementing new software solutions. That's according to the results of a Forrester Research survey of nearly 2,200 IT executives and technology decision-makers at large companies and SMBs.

The results serve as a sobering reminder for vendors of the latest technology -- and the solution providers that work with them -- that IT managers are usually more concerned with keeping the lights on and less with implementing the latest-and-greatest software technology.

The survey, conducted late last year in North America and Europe, found that the poor economy created a backlog of business application software upgrades and many companies plan to tackle those upgrades this year, Forrester said.

"Despite all the hype around new technologies that hit the market in the past few years, firms are devoting most of their IT spending on already-installed technologies," said Holger Kisker, a Forrester senior analyst, in a statement. "As long as businesses are prioritizing cost cutting and efficiency improvements, tech vendors must provide clearer business justifications for their offerings and demonstrate the functional fit with business requirements that their solutions provide."

Forty-one percent of large companies and 21 percent of small and midsize businesses plan to upgrade their existing finance and accounting software this year, the survey found, while 48 percent of big companies and 19 percent of SMBs intend to upgrade their CRM applications. And 52 percent of large enterprises and 18 percent of SMBs will be upgrading their industry-specific software in 2010.

For SMBs that are planning on implementing new software, the survey found that more than 20 percent of all SMBs would implement CRM applications or information and knowledge management software in 2010 or later. Forrester said those represent the fastest-growing SMB software markets in 2010.

"Despite all the hype around new technologies that hit the market in the past few years, firms are devoting most of their IT spending on already-installed technologies," said Holger Kisker, a Forrester senior analyst, in a statement. "As long as businesses are prioritizing cost cutting and efficiency improvements, tech vendors must provide clearer business justifications for their offerings and demonstrate the functional fit with business requirements that their solutions provide."

The survey found that while cloud computing has generated interest among businesses, sales of software-as-a-service applications such as CRM are the main market driver while adoption of infrastructure-as-a-service systems is still slow. And while one-third of the surveyed businesses subscribed to SaaS applications or planned to do so within 12 months, most of those would not be used for mission-critical systems.