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GCC IT budgets up, but skills an issue, IDC study shows

IDC survey shows CIOs expect budget growth but still need skilled resources

(l) Ranjit Rajan of IDC and Johnny Karam of Symantec discuss the survey results.
(l) Ranjit Rajan of IDC and Johnny Karam of Symantec discuss the survey results.

CIOs in the GCC expect IT budgets to rise significantly in 2011, according to a new study by IDC, but lack of skills and costs still remain the biggest challenges to new IT projects.

The study, which was sponsored by Symantec, found that after insignificant rises, or stagnant IT budgets in 2010, over half of CIOs surveyed expect IT budgets to increase by 10-39% next year, while around 20% expected rises of over 50%.

Many of those surveyed however, Speaking to the press on the sidelines of a CIO roundtable in Dubai, Johnny Karam, MENA regional director for Symantec said that in conversation with CIOs, several of them have warned that budgets are likely to be allocated only on a project basis, rather than an annual basis, and that for many of them, renewed investment is vital to preserve businesses effected by cuts in spending due to the recession over the past two years.

"Last year, many CIOs were trying to keep the lights on, and were trying to withhold some of the spending that they were planning, but they all came to the conclusion that you can do that for so long, and if you continue doing it, it will have a negative effect on your organization. [Several CIOs] said they really need to come back to the levels of spending they were doing recently, in order to have their business stay competitive and efficient."

The study surveyed CIOs and IT managers in 40 end user organizations in the GCC, with around 30% each from the UAE, KSA and Qatar, and the remainder from Bahrain and Kuwait. The organizations were primarily in the oil & gas, financial and public sector, and the majority have over 1,000 employees.

In terms of challenges to new projects in storage, which accounted for around 20% of average IT budgets, cost and lack of skills both within the organization, and in external partners, were considered to be the biggest barriers, while in security projects, which account for 10% of IT spend, lack of skills and lack of senior management support were cited as the biggest issues.

In response, many organizations in the region were looking to control costs through measures such as vendor consolidation, outsourcing and the use of software-as-a-service.

Ranjit Rajan, research director at IDC MEA said: "More and more CIOs were looking at consolidating their suppliers, trying to gain cost benefits by consolidating, this is the most preferred response to optimize spending. More CIOs are now getting interested in outsourcing some of their internal IT - traditionally in this part of the world IT has largely been managed internally, and thirdly CIOs were looking at the increased use of software as a service, to adopt SaaS to cut costs,"

Rajan said that the survey also indicated that the main priority for CIOs in the region is the alignment of IT with the overall aims of the business, with more pressure on CIOs to make a difference to business results.

"In emerging markets you see this problem of aligning IT with business, because IT starts out in the early stages in a silo, with very little collaboration between business and IT. The downturn itself has created a need for them to work together to achieve the overall business objectives, and so there is increased scrutiny of IT from senior management, they are asking for IT to justify the investment, or if there are new projects that need the approval of top management, they are asking a lot more questions," he said.

The survey also looked at emerging areas in storage and security spending, in fields that are growing such as governance, risk and compliance (GRC), data loss prevention and cloud computing. The study found a growing awareness of these solutions and the issues they raise for IT, but uptake varied between technologies.

In the field of GRC, uptake of solutions was high, with 52% of those surveyed reporting that they had already invested in GRC initiatives, and further 22.5% planning on investing within the next 12 months. In the main, the adoption of GRC solutions was driven by regulatory requirements in the financial, either mandatory requirements imposed by the authorities, or through organizations that need to be compliant with international standards to do business outside of the region.

"The study has identified that regulatory compliance is also a concern for GCC corporations. Over 90% of CIOs have currently invested or are planning to invest in governance, risk and compliance solutions highlighting regulatory compliance as a major driver of security and storage investment," Rajan said.

Awareness of the aims of data loss prevention was high, with 80% respondents saying they planned to invest in solutions, mainly with the aim of ensuring that data is stored where it is supposed to be, and that it is classified properly and that it can only be accessed by authorized staff.

Uptake of solutions was not as positive however, with many CIOs unaware of the solutions available to provide DLP, and 97% saying that classification of data, to ensure proper control, was the most difficult aspect of DLP projects to achieve.

In cloud computing 62% of respondents said they were considering cloud computing, with most interest in areas such as web applications, collaboration applications, and storage on demand, with 21% saying they were already using come form of cloud service. However, for most business concerns around data ownership, security and regulatory compliance together with poor connectivity infrastructure would mean that cloud is seen a mid-term strategy, with 32% of companies not expecting to develop cloud plans within the next 18 months.

"The research has shown that business applications less likely to move to a cloud environment as opposed to web applications that are most likely to be deployed on a public cloud environment," added Karam.