Spiceworks Launches 13th Annual State of IT Report: Rising Costs, AI Investments, and Workforce Challenges Take Center Stage

November 13, 2024 at 11:00 AM EST

Powered by Aberdeen Strategy & Research, the Annual Report Will Be Showcased at SpiceWorld, Where Industry Expert Peter Tsai Will Share Key Findings

Spiceworks, a leader in IT insights and solutions, launches its 13th Annual State of IT report, providing a comprehensive outlook on rising costs, workforce demands, and the impacts of generative AI. Released in partnership with Aberdeen Strategy & Research, the report sheds light on essential strategies for IT resilience and growth in 2025.

The 2025 report highlights the growing importance of security, the rising cost of IT resources, and the critical need for talent development in the face of skills shortages, providing companies with a roadmap to plan for resilience and innovation.

Key Findings from the 2025 State of IT Report

Escalating IT Costs and Workforce Shortages

IT leaders report that rising product costs and IT labor shortages rank as their most significant anticipated challenges in 2025. This trend underscores the need for efficient processes, employee retention, and experimenting with new solutions that might help companies work to maintain service quality despite resource limitations.
Security and Generative AI Drive IT Budget Priorities

Reflecting the central role of technology in business operations, 64% of organizations intend to boost IT spending, with security and generative AI representing the areas most likely to see investment growth. More than half of companies (53%) report that heightened security concerns drive this budget increase.
Concerns Over IT Spending Sufficiency Across Job Roles

Despite the uptick in budgets, there is a clear disparity within organizations over whether these funds meet actual needs. Over half (54%) of IT staff feel their organization’s technology spending falls short, contrasting with just 19% of IT managers and 15% of senior leaders. This disconnect indicates a pressing need for greater alignment on budget expectations.
Flexible Vendor Preferences Reflect Changing Technology Needs

IT departments are actively seeking cost savings and willing to adapt, with businesses open to changing vendors for 59% of the technologies they use, on average. This flexibility underscores the importance for vendors to demonstrate superior value, clear differentiation, and cost-effectiveness in a competitive market to retain clients. It also creates opportunities for vendors to gain market share from competitors who don’t follow suit.
Talent Retention Poses Challenges even as Demand Increases

Hiring skilled IT talent remains challenging for 57% of senior tech leaders, as 43% of businesses plan to increase IT staff in 2025. Large enterprises, in particular, are twice as likely as smaller firms to expand their IT teams.
Career Growth Requires Essential Skills and Certifications

The report highlights skills gaps, with only 63% of IT professionals confident in their cybersecurity abilities and 53% in their coding skills. Notably, Gen Z respondents are twice as likely as Boomers to view AI prompting as a crucial skill, showing a shift toward AI readiness.
Small and Large Businesses Experience Resource Disparities in Security and AI

Larger organizations are three times more likely than small businesses to employ dedicated security staff and five times as likely to have AI-focused roles. These findings suggest that smaller companies may fall behind due to limited resources, highlighting a need for scalable solutions for leaner teams.

LIVESTREAM OF STATE OF IT RESEARCH

To bring these findings directly to industry professionals, Spiceworks is hosting a dedicated session at this year’s SpiceWorld conference in Austin, Texas from Nov 13-14. Entitled “The 2025 State of IT: Data-backed Insights on IT Jobs, Budgets, and Emerging Tech,” the session will be led by Peter Tsai, Head of Technology Insights at Spiceworks. Non-attendees may watch the livestream session 4:15 PM CT on Wednesday, November 13, 2024. Please join the Spiceworks Community to hear this event (live or on-demand) on Spiceworks.com.

CUSTOMIZED READ-OUTS

To receive a personalized read-out, including additional research segmentation by size, region, and industry, companies may request an appointment with one of Spiceworks’ market experts.

About the 2025 State of IT Report

The 2025 State of IT report is Spiceworks’ annual in-depth look into the critical trends shaping the tech industry, from budget priorities and workforce demands to emerging technology investments. Powered by Aberdeen Strategy & Research, the report has been published annually since 2013, providing trusted insights for IT leaders, tech vendors, and businesses looking to stay competitive in the ever-evolving IT landscape.

About Spiceworks

Spiceworks is a trusted platform connecting millions of IT professionals and technology providers. Offering actionable insights, industry news, and a vibrant professional community, Spiceworks supports IT leaders in making informed decisions that drive technology and business growth. The company’s annual State of IT report is a cornerstone of its commitment to sharing data-backed trends that matter most to IT professionals.

About Aberdeen Strategy & Research

Aberdeen Strategy & Research, the research arm of Spiceworks, brings over two decades of expertise in data-driven insights that empower organizations to optimize their IT strategies and navigate digital transformation. Partnering with Spiceworks on the State of IT report, Aberdeen provides in-depth analysis that helps companies anticipate and meet the complex challenges of today’s tech industry.