Half of software budgets spent on upgrades

IT budgets

European companies are spending more time and money keeping old software systems running than investing into new technologies.

A new report released by Forrester Research has claimed that around half of all IT software budgets are spent on maintaining or upgrading old solutions as although there has been excitement around new technologies in recent times, recession-struck budgets have not allowed them to be installed.

Holger Kisker, a senior analyst at Forrester, said in a statement: "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."

"As long as businesses are prioritising 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 report claimed that cloud computing is increasingly getting businesses excited, with about a third having either subscribed to software-as-a-service (SaaS) or planning to in the next year.

However, infrastructure-as-a-service (IaaS) growth is still very slow and dragging the cloud market back.

"Many vendors mainly position their cloud services toward SMBs with a belief that they will jump on the bandwagon first because they often have more limited IT budgets than larger enterprises." said senior Forrester analyst Stefan Ried in a statement.

"Instead, vendor strategists should investigate specific adoption levels by industry, region, or company size to identify their sweet spot for an SMB cloud offering. Large enterprises even adopt some cloud services significantly faster than SMBs."

Jennifer Scott

Jennifer Scott is a former freelance journalist and currently political reporter for Sky News. She has a varied writing history, having started her career at Dennis Publishing, working in various roles across its business technology titles, including ITPro. Jennifer has specialised in a number of areas over the years and has produced a wealth of content for ITPro, focusing largely on data storage, networking, cloud computing, and telecommunications.

Most recently Jennifer has turned her skills to the political sphere and broadcast journalism, where she has worked for the BBC as a political reporter, before moving to Sky News.