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Govts to cut IT costs by 15% by 2018

06 December 2013


Posted by Michelle Devonshire

Governments will cut spending on traditional IT by 15 per cent by 2018, according to expert predictions.

In just five years, the International Data Corporation (IDC) believes resources will instead be focused on the cloud.

Although much of its predictions focus on the US, it is nonetheless clear similar trends are expected in administrations worldwide.

General manager and group vice president for IDC government insights Scott Lundstrom said: "In 2014, governments will focus more on innovative value creation, shifting the role of IT from back-end operations to citizen services, and performance management will be the new lens by which government services are evaluated."

IDC also announced several predictions for the near future, claiming $1.2 trillion (£734.4 billion) will be spent on the Internet of Things.

During this same period, big data and analytics will become a major decision making method as the information assessment tools become more commonplace.

As for the cloud itself, around 20 per cent of such services in 2014 will feature enterprise architecture, a broad operating model catering to businesses, as a primary service area. This will grow to 45 per cent by 2017.

A recent study Netsuite found one of the biggest reasons for switching to cloud operations, from on-site enterprise resource planning systems (ERP), is to reduce IT and maintenance costs, as stated by 36 per cent.

A smaller group of 26 per cent sought cheaper alternatives to ERP itself while 25 per cent want increased access to their information, including through mobile devices. This is something arguably in favour of the cloud and, as the internet of things continues to grow, will likely be a more influential factor.

Other answers include wanting to automate and streamline various business processes (24 per cent) and simply finding current on-site solutions to be ineffective at handling finances in line with company growth (19 per cent).

Unlike ERP systems, which rely on the physical hardware and network of the company, cloud computing uses remote servers and can easily be expanded to meet growth and demand when it arrives. IDC's predictions suggest these benefits may be more greatly realised in the near future, with governments supporting the cause.

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