Citi’s survey of 101 CIOs suggests third quarter IT spending trended downward, led by weaker EMEA spending intentions.
Top of the CIO priority list is security, which retained top spot and continued to see increased prioritization vs. peers. Data/analytics and digital expenditure also figured among the top spending initiatives for CIOs.
Citi analysts said the survey indicates further signs of potential weakening demand --particularly in EMEA.
IT budget growth expectations fall below Oct-20 levels; EMEA much weaker — CIOs expect to grow their IT budget by +1.8% over the next 12 months, the survey found. The budget growth expectation continues to slip below the historical average and is down from the peak of +5.4% in the Sept. 2021 survey.
Highest priorities: Cybersecurity remains the highest CIO priority by a wide margin. Data / analytics remained at #2. Infrastructure as a Service (IaaS) moved up to #3 while digital transformation solutions continue to remain a top priority at #4 (although with a slight downtick) as organizations continue to look to modernize their business.
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© 2022 Citigroup Inc. No redistribution without Citigroup’s written permission. Net result of responses to the following two questions: Since the beginning of the year, which three initiatives have become a higher investment priority? Since the beginning of the year, which three initiatives have become a lower investment priority? Source: Citi Research |
Security / Systems Software — A weighted avg. of ~8% of IT budgets was earmarked for cybersecurity in the calendar year 2022, along with the expectation that budgets grow ~7% YoY in CY23E remains unchanged since the last iteration of the survey in the second quarter this year, and remains in line with the ~8% earmarked in CY21.
Both network and cloud security remain top of mind, with >40% of respondents citing each as a top 3 investment priority.
EU Tech — A further step-down in growth expectations of the European CIOs is consistent with the softening macroeconomic backdrop across the region.
IT Hardware & Telecom Equipment — The downshift in spending intentions for PCs in this survey is notable.
Cable, Satellite, & Telecom Services — Digital transformation initiatives remain a high priority. While we recognize a rising level of fragility to the global economic outlook, the majority of respondents indicate interest to at least maintain or increase their IT budgets.
IT Services — Although most IT Services companies have not indicated that they are seeing the slowdown in IT budgets that the survey is indicating, IT Services tends to be a lagging indicator of slowed budgets as it takes time for a corporates to adapt and adjust their IT Services spend. Digital transformation slipped a peg in top investment priorities in this survey but remained a top 5 selection as well as many of the elements of digital transformation remaining top investment priorities (cybersecurity, analytics, cloud, automation, etc.).
For more information on this subject, and if you are a Velocity subscriber, please see Global Technology - Citi CIO Survey: IT Budgets continue to moderate led by EMEA
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