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Related Expertise: Technology Industry, Principal Investors and Private Equity, Digital, Technology, and Data

IT Spending Pulse #2: Buyers Are Optimistic About 2021

By Federico FabbriAlejandro MayerBernd SchlotterFlorian Schmieg, and Akash Bhatia

A challenging period for tech vendors continues as the pandemic drags on. The sudden shift in IT spending during the spring was well documented. Our first IT Spending Pulse, conducted in the early spring of 2020, found certain areas of technology—most obviously those supporting remote work and collaboration—rapidly becoming priorities, even as companies cut their IT spending overall. Nonetheless, light has appeared at the end of the pandemic tunnel, as vaccine distribution begins to accelerate across the globe.

How are IT buyers responding to this changing reality? What does it mean for IT budgets? And where will buyers focus their spending over the coming year?

To find out, we conducted a second survey of IT buyers across the US and Europe in late October and early November, asking almost 700 senior IT executives about their spending plans and priorities for 2021 and beyond. (See “Our Methodology.”) Overall, executives expressed greater optimism this time than they had last spring. They aim to boost their spending on IT solutions to pre-COVID-19 levels or higher in the coming months, even in many industries that the economic downturn hit especially hard, such as retail, government, and health care. Only in the travel and tourism sector do they anticipate a continued reduction in year-over-year IT spending, albeit at a reduced rate.

Our Methodology

We surveyed almost 700 IT buyers from the US (60%) and Europe (40%) during October and November 2020 to understand their priorities, IT budgets, spending plans, share of company workload on the cloud, and views on other topics. Our respondents held positions at the vice-president or general manager level or above in the US and at the director level or above in Europe—and each had a clear view of their company’s IT priorities and budget. Half of the companies they represented were large (over $1 billion in sales) and half were midsize, and the companies were broadly distributed across the health care, industrial goods, financial institutions, tech, and retail industries.

In addition, buyers are shifting back toward pre-pandemic priorities, focusing on foundational spending to support their topline growth and gain competitive advantage. In fact, large-scale digital transformation—including the transition of IT architecture to the cloud—remains a key priority across industries. Our respondents say that they are also prioritizing analytics and cybersecurity solutions, even as remote work and collaboration remain an ongoing focus.

We also note an increasing trend toward spreading out IT buying decisions over several emerging roles, with new voices emerging—including those of chief data officers, chief digital officers, and chief information security officers. Even so, the most critical decisions still rest with the CIO or CTO, especially in smaller companies.

You can explore some of our detailed survey findings in the slideshow below.