Teneo predicts increase in managed IT service demand as IT heads look to unfreeze budgets

Over half of all IT Heads surveyed are planning to increase use of managed services to thaw deep frozen IT budgets. Survey highlights new focus on investing in productivity measures rather than cost cutting as downturn eases.

IT Heads still face frozen budgets but are looking to invest in improving productivity, according to a new survey conducted by leading infrastructure optimization specialist, Teneo. 60% of IT Heads surveyed stated that their IT budgets were still frozen – over two years on from the start of the economic downturn. One in five (20%) were more optimistic and reported increased IT budgets but the same number (20%) stated that their budgets were currently being reduced.

The survey also shows that IT Heads are now more ready to invest in technology which will boost network infrastructure productivity. Over the next 12 months, virtualisation management tops the investment wish list for 43% of respondents, change/configuration management is next with 37% and application performance management was selected by 31% of respondents.

To overcome budget shortfalls, reduce capital expenditure and total cost of ownership, 52% of IT Heads surveyed are planning to increase their use of selected managed services. Outsourcing network infrastructure management was the priority for 37% of IT Heads, one in five (20%) are planning to use a managed WAN optimisation service and 17% are planning to increase the use of software as a service (SaaS) or cloud computing offerings.

The survey also probed target areas for information security investment by IT Heads, with 46% citing data loss prevention as their top investment priority, 43% looking to replace their existing firewalls and 37% of respondents prepared to invest in measures to prevent network attack or unauthorised user access.

James Hall, Marketing Director, Teneo, commented:
“Although budgets remain frozen for many IT Heads, we are seeing a radical slowdown in the trend for budget decreases and it is encouraging to see them increasing for one in five. As a company, Teneo has seen robust sales growth as a result of the trend away from cost reduction measures towards investing in technology that improves network productivity and efficiency, such as WAN optimisation.

“The survey also shows sustained interest in outsourcing key areas of IT infrastructure management with over half of respondents (51%) planning to increase their use of outsourcing. From Teneo’s experience, IT Heads are looking to outsource areas where a third party supplier can simply provide a better service at a lower cost rather than developing specialist expertise themselves or tying up already stretched in-house resource.”

Notes to editors

Teneo distributed an on-line survey to 200 IT Heads of department with budgetary responsibility, and conducted follow-up calls to achieve a response rate of 18.5%. Survey responses were gathered between May 17th – May 27th 2010.