IT budgets are set to grow by 3.9% year-over-year in 2025, according to a KeyBanc survey of chief information officers.
Major business software businesses like Microsoft (MSFT, Financials) and Salesforce (CRM, Financials) could gain from the growth.
With 71% of big enterprises and 82% of small businesses predicting budget increases, chief information officers questioned by KeyBanc expressed hope about IT expenditure in 2025. This is a more optimistic view than the midyear study on 2024 by KeyBanc. Analyst Jackson Ader pointed out in a research that front-office apps and cloud infrastructure are increasingly driving IT expenditure priorities toward a possible revival in these areas.
With respondents giving Salesforce top importance in 2025, it is still a popular option for business software solutions. Microsoft, however, is underlining its leadership in cloud computing and importance in the evolution of generative artificial intelligence. Spending on generative artificial intelligence solutions is also expected to increase, mirroring more general industry use.
The poll also indicates that cybersecurity and data analytics are getting more attention. Top strategic provider for data and analytics was Snowflake (SNOW, Financials). With no documented client movement from CrowdStrike despite a summer downtime, CrowdStrike (CRWD, Financials) and Palo Alto Networks (PANW, Financials) maintained solid places in the security industry.
MongoDB (MDB, Financials) also got good marks for its analytics features, therefore supporting its place in the market.
Though expected budget growth, 62% of respondents said more attention on IT expenditure is needed. Among the most active vendors mentioned as implementing price hikes were Microsoft, Oracle (ORCL, Financials), and Salesforce.
With 88% of respondents stating no negative consequences, the poll also revealed that the most recent U.S. presidential election had no influence on IT spending.
The poll underlines how increasingly important technologies such cloud computing, cybersecurity, and generative artificial intelligence are becoming for top suppliers, presenting possible development chances. Rising price sensitivity and budget monitoring, however, can make it difficult for businesses to provide value while maintaining competitive pricing policies.
This research paper emphasizes the need of adjusting to changing market objectives in a situation where IT expenditure is both growing and under increasing assessment.
This article first appeared on GuruFocus.
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