Software spend across APAC expected to rise in 2010: Gartner

Hardware and IT staff spend to still dominate budgets in Australia, however

Investment in software is expected to dominate IT budget spend in 2010 across the Asia Pacific according to a new report from Gartner.

The Software Base Budget, Asia/Pacific, 2009-2010 survey of 323 IT management professionals across Singapore, Australia, China, Hong Kong, India and Malaysia found APAC organisations plan to increase their software budgets by 4.4 per cent on average in 2010, while overall IT budgets are expected to decline by 3.1 per cent on average.

The survey also found 38 per cent of organisations in APAC expect to increase their software budgets in 2010, while only 31 per cent expected to increase their overall IT budget.

Gartner research director, Yanna Dharmasthira, said that in the midst of economic volatility, hardware budget allocation remained a top priority in most countries. Software budgets, however, were a bright spot and continued to demonstrate a positive outlook.

On specific software spending, the survey found that SaaS spending is expected to be fragmented within Asia Pacific, with variation by country, vertical and software segment. When looking at enterprise application software by segments, however, customer relationship management (CRM) had the highest average budget spending change, followed by ERP and office and personal productivity.

“CRM's positive outlook has been consistent with our forecast and market share statistics that demonstrate end users prioritising customer retention in economic volatility,” the report reads.

While IT spending on hardware was expected to be about 26 per cent, IT Staff costs, rather than software, dominated the second spending slot at about 25 per cent. Software is expected to make up about 21 per cent of the budget followed by networking/telecoms at about 18 per cent and external IT services at about 10 per cent.

“In developed countries such as Australia and Hong Kong, allocation of budget to IT resources (IT staffs) is expected to be relatively higher compared with emerging countries,” the report reads. “This reflects the maturity of end-user organisations in these countries, which tend to have larger organisations as well as a larger IT team.”

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