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Gartner Consulting's Worldwide IT Benchmark Group Says Small and Midsized Businesses Spend Up to 60 Percent of their IT Budget on Infrastructure |
STAMFORD, Conn., July 26, 2005 — Small and midsized organizations (under $1 billion in revenue) are spending 53 percent to 60 percent of their total information technology (IT) budget on infrastructure, including data center, voice and data networks, desktop and help desk, according to Gartner Consulting's Worldwide IT Benchmark Service. For organizations over $1 billion in revenue, the average spent on IT infrastructure is just under 50 percent.
"For many small and medium sized businesses, particularly those that compete in highly competitive marketplaces, IT can be a key component of competitive strategy," said Howard Rubin, an associate with Gartner Consulting. "However, in more mature markets, some small organizations still treat IT as just another cost of doing business. Those organizations continue to focus on keeping IT costs down."
For companies with less than $1 billion in revenue, media companies and IT firms were among the leaders in terms of IT spending as a percentage of revenue in the 2005 rankings, at 8.16 percent and 6.85 percent, respectively (see Table 1). Banking and financial services organizations typically spend at the highest rates, but they ranked sixth and fourth, respectively, in the 2005 results. Energy and consumer products organizations under $1 billion in revenue are among the lowest spenders on average.
Table 1
Small and Medium Sized Businesses IT Spending as a Percentage of Revenue (by Vertical Market)
| Company Segment |
Percentage of Revenue Spent on IT |
| Media |
8.2% |
|
Professional
Services
|
6.9%
|
|
Information
Technology
|
6.9%
|
|
Financial
Services
|
5.9%
|
|
Electronics
|
5.6%
|
|
Banking
|
5.6%
|
|
Pharmaceuticals
|
5.5%
|
|
Health Care
|
4.6%
|
|
Construction
& Engineering
|
4.4%
|
|
Transportation
|
3.9%
|
| Cross Industry
|
4.5%
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Source: Gartner Consulting (July 2005)
About the Worldwide IT Benchmark Research
Gartner's Worldwide IT Benchmark Service surveys companies from more than 30 countries in over 20 industry sectors. To get additional Worldwide IT Benchmark research, organizations can participate in Gartner's data exchange at www.gartner.com/surveys.
Gartner offers the Worldwide IT Benchmark Service and The Worldwide IT Benchmark report, which includes five volumes of the most comprehensive and authoritative source of IT spending and performance data found in the industry. In addition to the historical database of more than 10,000 companies, this year's report highlights 2004-2005 findings of more than 1,900 companies.
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About Gartner:
Gartner, Inc. is the leading provider of research and analysis on the global information technology industry. Gartner serves more than 10,000 clients, including chief information officers and other senior IT executives in corporations and government agencies, as well as technology companies and the investment community. The Company focuses on delivering objective, in-depth analysis and actionable advice to enable clients to make more informed business and technology decisions. The Company's businesses consist of Research and Events for IT professionals; Gartner Executive Programs, membership programs and peer networking services; and Gartner Consulting, customized engagements with a specific emphasis on outsourcing and IT management. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, and has over 3,900 associates, including more than 1,100 research analysts and consultants, in more than 75 locations worldwide. For more information,
visit www.gartner.com.
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