Productivity tops next year software budget priorities, survey says

Dive Brief:

  • Productivity software tops other software categories in projected spending next year, according to the 2021 State of IT report published by Spiceworks Ziff Davis. The company surveyed 1,073 IT decision-makers in July. The productivity software category encompasses office software such as word processors, spreadsheet and presentation tools. 
  • Globally, productivity software is expected to account for 12% of software spend, up from 10% in 2020 and 2019. The focus on productivity is sharper among North American companies — which will devote 14% of their software budgets to productivity — than their European peers, who will allocate just 10%.
  • Investments on operating systems, security software and virtualization technology round out the top five software categories global companies will prioritize in 2021, signaling sustained enterprise interest in enabling remote work.

Dive Insight:

Though business priorities varied between industries, the need to shift to remote work was consistent across sectors. Cue the backbone of remote work: distributed access to tools that enable productivity.

A mix of factors drove interest in productivity software for 2021, including the coronavirus pandemic, a renewed focus on digitalizing business processes and a looming expiration date for a popular bundle. When companies are remote, businesses can find themselves facing the true cost of software ownership.

Prior to the crisis, companies may have had part-time workers sharing software licenses, working on one machine where software was installed locally, according to Robin Peto, director of research strategy at Spiceworks Ziff Davis.

“When companies are needing to enable a remote workforce and send a computer home with each one of those end users, they probably have to install the true number of licenses for those instances,” Peto said.

Beyond the crisis, traditional market dynamics are still at play. Usually, the end-of-support cycle for a software platform pushes companies to upgrade before vulnerabilities or outages hamper key business processes.

One critical end-of-life event from Microsoft could be increasing projected spend on productivity software, according to Peter Tsai, senior technology analyst at Spiceworks Ziff Davis. The vendor plans to end technical support and security updates for Microsoft Office 2010 by October 13. 

A 2017 study from Spiceworks Ziff Davis found Office 2010 to be the most commonly deployed version of Office in the workplace. Globally, 83% of organizations run it somewhere on their networks, according to the report.

“With so many organizations running the older version of Office, this end-of-service event will likely drive upgrades in 2021,” said Tsai in an email.

Tech priorities for the year ahead are focused on sustaining operations and advancing productivity. In software, CIOs search for clear return on investment, with cost-cutting in mind.

Even with economic uncertainty as a mark of the crisis, 80% of businesses still expect IT budgets to stay the same or increase in the year ahead, the survey showed. The coronavirus pandemic was pushed forward more than one-third of budget growth for 2021