A 2022 Outlook and IT Cost Trend Analysis
News & Trends

A 2022 Outlook and IT Cost Trend Analysis

A 2022 Outlook and IT Cost Trend Analysis

Thursday, January 13, 2022 / Michael Kettenring

Entering a new phase of digital transformation

Of course, the current pandemic is largely to blame as it has triggered a slew of unintended consequences.

The most notable trend is “remote collaboration”. In 2020 and in 2021 COVID-19 forced companies to change the way they do business and they used technology to do it. Meeting virtually has replaced many in-person meetings and events in 2021. While it would be convenient to think we will return to the old normal, this digital transformation is only starting to transform businesses.

Working from home, from anywhere, being connected 24/7 will impact not only corporations but the workforce and our society. Talent is seeking more satisfying work as indicated by the high number of people quitting their current jobs. We can likely expect companies to fundamentally change their team collaboration, workflow.

We envision new and innovative technologies to enable organizations to reinvent themselves with more real-time collaboration tools available in the cloud.

Customer communication will change, too

Yes, COVID-19 has left its mark again. People stay home and go online more often. In 2021, consumers aged 16 to 64 use social media for 2.5 hours daily. Internet use on all devices reaches almost 7 hours per day.

Such tendencies nudge organizations to increase the share of digital communications. Businesses send more emails and introduce live chats, voice communications, in-app calls, and other digital touchpoints. Digital communications enable brands to stay in touch with their target audience. Businesses use them for marketing, sales, and everyday interactions.

As a result, we will see an increase in the quantity of online communications with consumers, customers. This influx of messages will lead to more opt-outs, if not managed in a sensitive manner. The quality of communications considerably affects the quality of services and user experience. Hence, marketers need to keep the finger on the pulse and deliver messages that sound relevant to modern consumers.

We believe that knowing how to contact individual consumers with the relevant message using the most accepted communication tool will be the biggest online marketing challenge for 2022.

How will this impact IT Costs in 2022?

To no surprise this coming year will be unlike any other when it comes to IT budgeting. We envision an increase of 10% to 15% average, identifying the following drivers:

  • Digital transformation and its effect on technology investments
  • The continued trend of customers to buy online
  • The impact of connected devices on cyber security

In general terms, the explosion of cloud spending in recent years shows no sign of slowing down. According to Gartner, global public cloud spending is forecasted to reach $332.3 billion in 2021, increasing by 23.1% from $270 billion in 2020 as companies embrace virtualization and continued digital transformation.

With substantial growth in devices and enterprise software, their 2021 forecast also shows expansion in data center systems (7.7%), IT services (9%), and communications services (4.6%).

In 2022, Gartner estimates that all IT spending segments will experience growth, with devices (14%) and enterprise software (10.8%) producing the highest growth. This is likely a result of organizations altering their focus in an effort to provide a more innovative and productive environment for their workforce. With many organizations embracing hybrid or work from home models, technology that elevates the human experience and well-being is critical. Tools such as collaboration platforms and social software will become a cornerstone.

A shift in spending

Yes, IT costs are on the rise. But is it all bad? Not really when you look deeper. As an example, the investment into remote communication technologies is more than offset by a decrease in office rent. Traditional marketing methods are replaced by less expensive online marketing methods.

In other words, organizations experience a shift in the balance sheet, if handled right. It is up to management to embrace this shift rather than holding on to the old ways of doing business.

The good news is that online technologies are much easier to budget for with so many metrics to prove their ROI. They also adapt easily to change – and more change is certainly to come!