…This time from the SME market, where ChannelWeb.co.uk reports on CompTIA’s research.  56% of UK SMEs plan to increase their IT budgets in the next 12 months, with a focus on IT security, and the number of UK firms planning to increase spend has grown to 56% from 54% last year (while the percentage of US firms planning to invest more has dropped from 64% to 52%).

Other interesting stats out recently highlight that there is slowing growth in the services market (IDC), whilst Silicon says that Datamonitor is showing spending growth in healthcare:

Viviane Reding, Member of the European Commission responsible for Information Society and Media made a speech yesterday on the theme “Why ICT research is even more important in the aftermath of the financial crisis.”

She made some interesting points about the amount of investment the EU is making (more than 2bn euro in 18 months), the areas where they want to encourage European growth (software and services, especially in the cloud). Some of the interesting parts of the article and what she had to say are below: 

“The ICT sector provides the heartbeat of the real economy, of our productivity growth, of our capacity to innovate and create jobs and of our ability to address key societal challenges.

What is on the agenda at ICT 2008? We will unveil details of the EU-funding for the next wave of ICT projects – more than € 2 billion of EU funding over the next 18 months.

If Europe wants for example, to lead the transition to a low-carbon, knowledge economy we can only do this with a massive and targeted development and take-up of innovative ICT solutions.

• In telecoms, European equipment manufacturers are leaders in broadband data networks and mobile devices.
• Europe is also a leading worldwide player in the design, integration and supply of embedded systems.
• Europe has secured 30-35% of the market for ICT systems embedded in products in domains like automotive, industrial automation and avionics.
• Europe is also a leading player in the semiconductor industry. Here European programmes have helped us build and keep these positions as the recent funding decisions by the embedded systems and nano-electronic Joint Technology Initiatives demonstrate.
• Europe also has leaders in enterprise software, equipping many of the world’s major companies and SMEs. World leading research on software technologies is also taking place in our public labs. We need to build on this and expand further our presence in software and services including in important areas such as web-based services 

The second principle is that we should be well placed to seize the opportunities of future markets. Let me highlight two such markets: The Future Internet and ICT for Energy Efficiency

Our investments in research and the opening up of the new markets will not be fully exploited unless we can make Europe a much better place to establish high-tech start-ups. Today, few European SMEs break through the ceiling of € 20 million turnover. Why is it that so few European ICT start-ups have come through to become global players?”

The whole article is available from Public Technology

This article features an interesting breakdown of Westpac’s IT budget in the light of the CEO’s concerns over IT’s performance. Interestingly, the breakdown shows the bank’s compliance spending has increased dramatically – part of a wider trend?

http://www.zdnet.com.au/news/business/soa/Kelly-laments-Westpac-s-poor-IT-performance/0,139023166,339292944,00.htm

Andrew Higgins, Tesco Chief Executive, pointed the way to a wave of IT spending by retailers looking to capitalise on new business models.

Tesco’s plans include extending its current financial services offerings to that of a “full service retail bank.

According to this Finextra article, the supermarket previously dismissed suggestions that it would offer mortgages because they were seen as unprofitable. However Higgins said the credit crunch – and the return of “rational pricing” in mortgages – appears to have created a potential opportunity.

And where Tesco goes, others will follow – needing the solutions and expertise to set up new business operations.

…this time a quite positive (surely not) report on IT spending’s prospects. And not in a “we have to stay positive” way, but in a “IT spending won’t go down too much because it is already fairly sensible, and IT will be key in reducing other costs” way. http://www.vnunet.com/vnunet/news/2229263/recession-bad

Or… Tower Group’s view today that the UK government’s bank bail out it will create a two-tier spending system. http://www.finextra.com/fullstory.asp?id=19221

As I argued a couple of weeks ago, the only way to really understand this is to get out there and speak directly to customers – then build 2009 sales-aligned marketing programmes that address their needs and fit their plans.

An article by Paul Taylor in the FT recently claims that companies have spent too much on propping up and maintaining existing systems for ever-decreasing productivity gains. He argues, with the support of a recent PwC report, that the next cycle of IT value creation will lay in the function’s ability to support business process innovation.

“IT innovation is the chief casualty of this preoccupation with system maintenance. In 2007, only 13 per cent of the average IT budget supported innovation in business processes or products. The remaining 87 per cent disappeared into the black hole of general maintenance and upkeep.”

“The PwC report suggests that the ability of chief information officers and IT managers to break these long established spending patterns and support business process innovation instead, will be the most important factor for improving IT value and productivity.”

The Harvard Business Review’s November interview is “Cisco Sees the Future“, a free in-depth interview with the company’s CEO.

The article covers how the IT market is changing, how Cisco seeks to manage that change, where IT is going and how they tap opportunity in economic down cycles.

Finextra’s story this morning on HSBC’s investment in energy management technology shows that with cost-cutting programmes comes IT opportunity.

There was a very interesting view on this from Egg’s ex-CIO, Tom Ilube when I interviewed him last week on what he would be doing if he was still a CIO in the current economic climate. Subscribe to this blog’s RSS feed or subscribe via email to be the first to receive Tom’s interview transcript, coming soon. 

Spending on IT security will continue to grow next year, according to new data unveiled by Forrester Research. 21 percent of respondents expect to increase their IT security budgets in 2009, while nearly three-quarters of those surveyed expect no cutbacks in their security spending.

Only 6 percent of respondents anticipate having to cut their security budget next year despite the current economic uncertainty.
http://www.tradingmarkets.com/.site/news/Stock%20News/1863297/

The research also says security makes up 10 percent of overall IT operating budgets in 2008, up from 8 percent last year.  Nearly 50 percent of respondents report to a board/CEO or an executive committee – security is clearly no longer embedded within IT.

Another post in our “IT Boomhunter” series – helping you find growth IT markets in fast-changing times.

This McKinsey report that shows how remote infrastructure management is predicted to be a boom area. “While other offshoring services have grown rapidly, the management and maintenance of core infrastructure from afar has been slow to gain popularity. Only a sliver—about 7 percent—of the addressable market is being captured. But our research suggests that this is about to change. Shifts in customer attitudes and economics could trigger rapid growth for these services, known in the industry as remote infrastructure management.”

“34 percent of CIOs say they expect to offshore some infrastructure services over the next three years—a sharp increase from 19 percent in a similar survey a year earlier.” McKinsey.

The PDF of the report is here.