It’s that time of year again when companies begin to reevaluate their IT budgets and look toward the New Year. According to Computerworld’s Forecast 2014 survey of IT executives, IT budgets are making a comeback. Specifically, 36 percent of respondents expect an increase in their IT budgets and half claim that their budgets will hold steady. Moreover, Forrester Research predicts that U.S. IT budgets will increase 6.7 percent in 2014 with spending on software, cloud computing, and analytics climbing and spending on hardware decreasing.

“Cloud, mobile, smart technologies are all very desirable, and we’re finding that as companies are prioritizing those –and as the economy improve – they’ll have more room to spend on that.”
– Forrester Research analyst, Andrew Bartels

So without further ado, let’s take a deeper look at what’s topping the list for IT budgets in 2014.

  1. Hosted Services: It’s no surprise that IT departments are being pulled in multiple directions and are being forced to wear many hats. As a result of last year’s IT budgets being significantly slashed, more demand has been put on employees that don’t necessarily have the skills and expertise needed. Because of this, many businesses are turning to hosted services to help carry the load. IT departments are using hosted services to free up employees for other pressing tasks; to fill skill gaps; cut down on costs; and improve efficiency, among many other things.
  2. Cloud computing: According to a study by CEB, investment in cloud computing will continue to rise steadily. By 2014, businesses spending more than four percent of their IT budgets on Software-as-a-Service are projected to reach 24 percent, up from just eight percent in 2012. More specifically, industry analysts are predicting that more companies will move to a private cloud infrastructure. In fact, big-named companies like HubSpot and Zynga recently abandoned Amazon Web Service (AMS) in favor of a private cloud platform.
  3. Mobile: Companies that have yet to jump on the mobile bandwagon will make it a priority in 2014. In fact, according to the aforementioned study, the number of companies spending more than four percent of their IT budgets on mobile applications is expected to reach 15 percent by 2014. There will be a particular focus on RFID, remote access, Wi-Fi, mobile/wireless devices, and mobile device management.   
  4. Big Data: With IDC predicting that the market for big data will reach $16.1 billion in 2014, it would be foolish for businesses to ignore this dominant technology. Spending priorities for big data in 2014 will include enterprise analytics, data mining, and business intelligence tools.

While IT budgets have made a recovery, CIOs should tread carefully as there are a number of political and economic issues that have yet to be played out this year. Many of these could in fact shake up next year’s budgeting plans, warns Bartels. Moreover, the economy in Europe and China’s supposed economic slowdown are also concerns companies in the U.S. must consider.

Tell us… what do you plan on adding to your IT budget for 2014?