Software Budgets May Grow Faster Than Overall IT Spend

Business establishments in the Asia Pacific region are expected to spend the highest amount on new software in 2010, though they are expected to continue to be conservative with their IT budgets.

According to a recent survey by analyst firm Gartner, organisations in the Asia Pacific plan to increase their software budgets by 4.4 per cent on an average, while their overall IT budgets were expected to decline 3.1 per cent on an average. The average expected increase in the software budget by organisations in the Asia Pacific region is higher than all other regions surveyed, including Europe, West Asia and Africa, North America and Latin America, the research firm said.

Gartner surveyed 323 IT managers in Australia, Singapore, Malaysia, China, India and Hong Kong, as part of a worldwide survey of 982 respondents. Respondents were asked if they expected their 2010 IT budget to be below, the same or exceed their IT budget for 2009.

India-based respondents were the most optimistic, with the highest number of respondents intending to increase their IT budgets in 2010 (42 per cent), followed by China (32 per cent). However, Malaysia-based respondents remain pessimistic, with the largest number of respondents intending to cut their spend (52 per cent).

“For most organisations, the budgeting process happens once a year, but adjusting the IT budget is a continuous exercise driven by economic conditions and changes in the business,” said Gartner research director Yanna Dharmasthira.

“In the midst of economic volatility, hardware budget allocation remains the top priority in most countries, but software budgets are a real bright spot and continue to demonstrate a positive outlook, although more cautious than last year’s survey,” Dharmasthira added.

Software is expected to represent the second-largest portion of the IT budget in most countries, with the exception of India where software and hardware spends are roughly equal, and Australia. In Australia the spending is notably higher on IT staff. India is the most aggressive with the highest software budget allocation (26.9 per cent), followed by Singapore (25.8 per cent), Malaysia (24.1 per cent) and China (23.1 per cent), it added.

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