sample japan it budget and spending trends 2016 · 2.3.1 growing willingness to spend on cloud and...

ITR Report Japan IT Budget & Spending Trends 2016

2016 ©ITR Corporation. All Rights Reserved. 1

Japan IT Budget & Spending Trends 2016

ITR Corporation

SAMPLE

Sample ITR Report

2 2016 ©ITR Corporation. All Rights Reserved.

2.1 Steady growth of IT spending

2.1.1 Steady growth of IT spending

The figure below shows the transition of IT budget abundance as usual

(Figure 2-1). The proportion of companies whose IT spending increased (the total of “Increased 20% and more” and “Increased less than 20%) in FY2015 was XX.X%, which was smaller than the previous year. On the other hand, the proportion of the companies whose IT spending decreased (the total of “Decreased less than 20%” and “Decreased 20% and more”) was X.X%, which was the record low for the first time since the first study in 2001. The ratio of the companies whose spending “Remained level” was about XX% (XX.X%) of the total. As for the outlook of FY2016, the proportion of the companies with increased IT budget will slightly fall and those with the decreased IT budget will grow compared to FY2015; however, the overall trend will remain unchanged. Japanese companies seem to have secured the IT budget relatively in a stable manner although the situation is not comparable to the high growth in early 2000s.

Figure 2-1．Yearly transition of IT budget abundance （FY2014～FY2016 estimates）

Source: ITR “IT Budget & Spending Survey 2016”

The figure below shows the yearly transition of IT budget abundance index (added up the points, e.g. -20 for “Decreased 20% and more,” 0 for “Remained level,” +10 for “Increase less than 20%... and divided by the number of responses.) The FY2015 figure was X.XX, which was larger than the estimate made in the previous year. The FY2016 forecast was X.XX, maintaining almost the same level as the actual FY2015 (Figure 2-2).

0% 25% 50% 75% 100%

FY2016 estimates（N=2443）

FY2015（N=2443）

FY2014（N=1095）

Increased 20% and more Increased less than 20% Remained levelDecreased less than 20% Decreased 20% and more

※

※FY2014 Survey



Figure 2-2．Yearly transition of IT spending abundance index （FY2001～FY2016 estimates）


3.61

2.45

1.95

2.90

2.51

3.88

2.75

1.87

-3.80

0.040.60 0.70

2.10

1.46

1.51

2.602.20

2.74

3.53

2.93

3.923.68

1.31

-0.98

1.44

0.83

0.43

1.69

0.97

1.42

-5

-4

-3

-2

-1

0

1

2

3

4

5

Actual

Estimate

Sample ITR Report


2.1.2 Limited IT spending for “growth"

The companies were relatively successful in securing IT budget; however,

some issues were discovered in their IT spending. The average ratio of new investment (costs for new system development and large-scale replacement) in FY2015 was XX.X% when the total IT spending was divided into regular costs (ongoing costs for operation and maintenance) and new investment (Figure 2-3). This ratio, which has fluctuated since late 2000s, had the lowest result, getting close to XXs%. This clearly means “XX% of the IT budget is spent on maintaining existing systems.” It is an urgent matter for the companies to have strategic freedom in IT spending while reducing regular costs.

Figure 2-3．Yearly transition of new investment ratio over IT spending


Figure 2-4．Spending ratio of new investment by purpose


FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015

Business growth

Business efficiency

improvement

Business continuity

（N=2246）



This survey added new questions to understand allocation of new investment into three categories of “Business growth” “Business efficiency improvement” and “Business continuity.” As a result, each one of them had roughly 1/3 of new investment (Figure 2-4). The combination of the Figure 2-3 and Figure 2-4 results yields that only XX% of the IT budget was spent for growing business. Japanese companies have been unable to adequately secure budget for “growth.”

2.1.3 Risk management cost further increased

While IT spending for growth is insufficient, the ratio of risk

management cost, which has been observed on a fixed-point basis, increased from the previous year. The cost ratios of all “Information security management” “Disaster control” and “IT internal control” over IT budget were the highest in the last 5 years (Figure 2-5). These reflect the increasing threat of targeted attacks, natural disasters, and accounting frauds. The companies’ IT spending is directed toward risk management.

Figure 2-5．Yearly transition of risk management cost ratio over IT budget （FY2011～FY2015）


11.2%

9.6%

15.3%

9.3%

8.7%

13.5%

8.7%

7.9%

11.5%

9.2%

7.3%

12.9%

7.6%

7.0%

12.5%

IT internal control cost

Disaster control cost

Information security cost

FY2011FY2012FY2013FY2014FY2015

Sample ITR Report


2.2 Important IT trends in FY2016

2.2.1 “Compliance with ‘My Number’ System” ranked high in priority

The priority ranking of concrete IT measures reflected the companies’

attitudes to stress risk management. “Integration / restructuring of IT infrastructure” and “Visualization / optimization of business process” were positioned number 1 and 2, respectively as ever. However, “Compliance with ‘My Number’ System (Social Security and Tax Number System)” came up to the third place (Figure 2-6). The XX.X% execution rate of this item is low, given the fact that “My Number” System will be implemented in FY2016; it is hard to say the companies are ready for the change. We expect the companies will rush into introducing the systems to collect and store numbers securely.

On the other hand, “Cloud usage of newly introduced systems” and “Cloud shift of existing systems” were ranked high as the technologies in new fields. Enterprise use of cloud computing has become common.

Figure 2-6．Transition of priority-index and execution rate of major IT trend items


0%

20%

40%

60%

80%

1.0

2.0

3.0

4.0

Priority-index

Execution rate (FY2015)

Execution rate (expected in FY2018)

（Execution rate）（Priority-index）



2.3 Willingness to spend on technologies

2.3.1 Growing willingness to spend on cloud and mobile

The last section addresses the spending trend on technologies. This

survey asked about the current introduction status and the future spending plan of 100 items that were categorized into “Infrastructure / device,” “OS / middleware,” “Application,” and “Security / service.” The expansion level of currently introduced items was shown as “Spending abundance index.” Also the probability of the companies to newly introduce the items in FY2016 was shown as “Potential for new introduction.” These were plotted in Figure 2-9 in the vertical and horizontal axes, respectively.

Figure 2-7．Willingness to spend on products / services (Infrastructure / device)


“Tablet” and “Smartphone” had the top two of spending abundance indexes as they were in the previous survey, showing high willingness to spend on mobile related items. As for the potential for new introduction, virtualization technologies such as “Client virtualization / thin client” “Storage virtualization” and “Server virtualization” were high. Also, the indexes related to physical server products such as “HPC / mainframe” were negative while cloud related products such as “SaaS,” “PaaS” and “IaaS” had high spending abundance indexes, showing the shift to the cloud services.

LAN / WANRemote access

Wireless LAN

Netw ork virtualization / SDN

VoIP / SIP

LTE / 4G

MVNO

HPC / mainframe

Mid-size / brade server

IA Server

Converged appliance

Server virtualization

Storage （Disk add-on / DAS）

Storage （NAS・SAN）

Storage virtualization

PC

Client virtualization / thin client

Smartphone

Tablet

Wearable devices

IoT

3D printer

Data center

SaaS PaaSIaaS

DaaS

BaaS

Private cloud

-4.0

-2.0

0.0

2.0

4.0

6.0

8.0

4.0% 8.0% 12.0%

Spending abundance index

Potential for new introduction

Sample ITR Report


As for other categories, “XXXXXX” in OS / middleware, “XXXXXX” in Applications, “XXXXXX” and “XXXXXX” in Security / service were emphasized, respectively.

2.4 General comment



3.1.3 IT budget abundance and IT budget abundance index by sales volume

The figures below show IT budget abundance and transition of IT budget

abundance index in FY2015 and FY 2016 estimates by sales volume. The companies and organizations with no sales were classified based on the

annual “revenue” and thus the “no sales” segment has been removed since the survey in the previous year.

Figure 3-7．Transition of IT budget abundance index by sales volume (FY2015 – FY2016 estimates)


0 1 2 3 4

Average（N=2443）

More than 500 billion yen（N=339）

100 〜 500 billion yen（N=272）

50 〜100 billion yen（N=212）

10 〜 50 billion yen（N=552）

1 〜 10 billion yen（N=795）

Less than 1 billion yen（N=273）

FY2015

FY2016 (estimate)

Sample ITR Report


Figure 6-10．Priority-index of major IT trend items by number of employees

1.0

2.0

3.0

4.0

Large company

Medium-sized company

SME

（Priority-index）



Figure 6-16．Yearly transition of IT trend items execution status （Priority: No.14～16）


0% 25% 50% 75% 100%

Survey in FY2014

Survey in FY2015

■Promotion of digital marketing

Already executed To be executed in 3 yearsConsidered and decided not to execute Not yet considered

0% 25% 50% 75% 100%

Survey in FY2011

Survey in FY2012

Survey in FY2013

Survey in FY2014

Survey in FY2015

■Use of open source software


0% 25% 50% 75% 100%

Survey in FY2014

Survey in FY2015

■Business use of IoT


Headquarters ITR Corporation

3rd floor Shintoshin-Maruzen Bldg.,

3-8-3 Nishishinjuku, Shinjuku-ku,

Tokyo 165-0033 JAPAN

Tel: +81-3-5304-1301

Email: [email protected]

https:www.itr.co.jp

ITR Report

Japan IT Budget & Spending Trends 2016

Published in April, 2016

About ITR ITR is an independent IT research and consulting company that offers solutions to issues related to business and IT. ITR is headquartered in Tokyo and used to make alliance with largest IT research firm and subsequently made alliance with META Group, Forrester Research, Constellation Research. It provides consulting services on corporate IT strategy and support for IT-related benchmarks, ROI and effectiveness optimization, strategic data utilization, vendor and product evaluation and selection, business strategies, and marketing. It also conducts surveys and analyses on fields such as future IT trends. ITR was founded in 1994 and is based in Tokyo.

Copyright All copyrights and other rights to the contents of this document belong to ITR Corporation. It is strictly prohibited to transfer, duplicate or input into electronic media, etc. these contents without the prior written permission of ITR Corporation. Company names, product names and so forth appearing in this document are the trademarks or registered trademarks of their respective owners.

sample japan it budget and spending trends 2016 · 2.3.1 growing willingness to spend on cloud and...

Documents