Most IT budgets are spent on maintaining systems instead of innovating: Oracle

Most IT budgets are spent on maintaining systems instead of innovating: Oracle

Cloud vendor finds that only 20 per cent of IT spending is for adding new capabilities

When businesses are faced with the choice of maintaining the status quo or innovating, the majority tend to go with the former.

Speaking at Oracle CloudWorld in Sydney, chief communications officer, Bob Evans, said that 80 per cent of IT budget is spent on maintaining systems, with 35 to 65 per cent of that being spent on integration.

The remaining 20 per cent is then spent on adding new capabilities.

“The bottom line is that four per cent of revenue is spent on a commodity that does not improve competitiveness,” Evans said.

When it comes to identifying today’s enterprise imperatives, Oracle has found 65 per cent of companies are saying that social media is a “significant or critical risk” to their brand reputation

At the same time, 90 per cent of companies will support their applications on personal mobile devices by 2014.

“Ninety per cent of Fortune 500 companies will have a Big Data initiative in place by the end of 2013,” Evans said.

When it comes to the Cloud, 80 per cent of business leaders view the technology as a launch pad to further agility and innovation.

The trends that Evans sees shaping the market include globalisation, with nine billion Internet devices expected by 2012 and 50 billion by 2020.

“The rise of mobility has meant there are six billion mobile subscribers,” he said.

“Eight-seven per cent of the world‘s population is mobile, and data is growing at a 78 per cent compound annual growth rate.”

The data explosion is a result of 90 per cent of data being created within the last two years, with Evans pointing to predictions of a grown of 50 times by 2020.

Social is playing a bigger role than ever before, with 26 per cent of consumers admitting to posting negative comments, 86 per cent ending business, and 94 per cent willing to pay more for a great experience.

“Social is business and consumers are driving the experience,” Evans said.

Patrick Budmar covers consumer and enterprise technology breaking news for IDG Communications. Follow Patrick on Twitter at @patrick_budmar.

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