Software budgets worldwide expected to increase

Business spending on software is set to return

September 9, 2009

Business spending on software is set to return

Although organisations in Asia Pacific expect to continue to be conservative with their total IT budgets in 2010, software budgets are expected to increase, according to a survey by Gartner.

The survey showed that organisations in Asia Pacific plan to increase their software budgets by 4.4 percent on average in 2010, while overall IT budgets were expected to decline by 3.1 percent on average. More organisations in Asia Pacific (38 percent) expect to increase their software budgets in 2010 than their overall IT budget (31 percent).

The average expected increase in software budget of 4.4 percent is higher than all other regions surveyed including Europe, Middle East & Africa (EMEA), North America and Latin America.

“For most organisations, the budgeting process happens once a year, but adjusting the IT budget is a continuous exercise that is 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 when compared with last year’s survey.”

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 spend are roughly equal) and Australia (where spending is notably higher on IT staff). India is the most aggressive with the highest software budget allocation (26.9 percent), followed by Singapore (25.8 percent), Malaysia (24.1 percent) and China (23.1 percent).

“Software vendors should not only focus sales efforts on traditional hot spots such as India and China, but look at opportunities in mature markets too.  The intentions to increase software budget have become more varied among different countries and organisations, presenting good opportunities in a mix of developed and emerging countries,” said Ms. Dharmasthira.