The highly anticipated 2023 State of IT Report comes out this month, and this annual research from Spiceworks Ziff Davis continues the tradition of providing interesting and useful insights about what’s happening among practitioners in the realm of information technology.

As we approach the transition from 2022 to 2023, our perennial interest in IT spending is amplified by the current macroeconomic context — i.e., inflation, rising interest rates, volatile stock and cryptocurrency markets, and other sources of uncertainty. Perhaps now more than ever, we’d all like to know how well our budgetary plans line up against those of other organizations.

There are some variations by geographic region, but globally here are some of the high-level trends:

  • More than half (54%) of all respondents are increasing their IT spending from 2022 to 2023; 40% will be spending about the same, while just 6% plan to decrease their IT spending in the coming year.
  • In terms of the absolute dollar increase from 2022 to 2023, across all respondents, IT spending is projected to be up by about 12.6% — happily, higher than the rate of inflation, which is currently at 40-year highs (e.g., 8.3% in the US, as of August).
  • Even so, not all companies spend the same. The planned change in IT spending ranges from -6% to +70%, with a median of about 5%, which is less than the rate of inflation. In fact, an 8.3% rate of inflation would be around the 60th percentile of year-over-year IT spending from 2022 to 2023 —e., 60% of all respondents are not keeping up with the rate of inflation, and 40% are keeping ahead of inflation by spending more.

To be fair, I don’t actually know the current inflation rate for IT products and services — this little analysis is using the US consumer price index of 8.3% as a proxy.

A different way to squeeze some insights out of the 2023 State of IT Report findings with respect to IT spending is to look at planned IT spending per employee. In this context, spending is exclusive of IT staff, i.e., it reflects the annual budget for IT spending on hardware, software, and services, divided by the number of employees.

For the following, global findings have been converted from local currencies into US dollars (based on exchange rates as of August):

For example:

  • Suppose your organization has 100 employees, and your annual IT budget (not including staff) is US$250,000
  • That translates to US$2,500 per employee
  • Globally, US$2,500 per employee would be in the 72nd percentile of the respondents in the 2023 State of IT Report

To look up how your organization compares in terms of IT spending per employee, you can look up what percentile you’re in here (remember to convert from your local currency to US dollars).

Every organization is different, and obviously there’s no “correct” amount to spend on IT. Even so, it’s useful to have some way to calibrate what our budgetary plans look like compared to those of other organizations.

And for many more great insights, be sure to check out the 2023 State of IT Report.