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ICT Investment Trends In Utilities

Published on: Dec 2016 | From USD $2995 | Published By: GLOBAL DATA | Number Of Pages: 33

ICT investment trends in utilities

A larger proportion of utilities have indicated that they are increasing their ICT spend in 2016 compared to the previous year.

Key Findings
- Networking equipment and cyber security hardware are the two biggest items on utilities' hardware budget, likely driven by the related challenges to security and communications posed by smarter systems
- Software licenses are still the largest single item in software budgets-many utility-specific solutions are not available through XaaS models and utilities are still spending significant sums on licensing specialist and custom software such as energy market models
- IaaS is the fastest growing cloud solution, in terms of new investment

ICT investment trends in utilities presents the findings from a survey of 112 utility companies regarding their Information and Communications Technology (ICT) investment trends. The survey investigates how utility companies currently allocate their ICT budgets across the core areas of enterprise ICT expenditure: hardware, software, IT services, communications, and consulting. The report illustrates the core technologies that enterprises are investing in, including business intelligence, IoT, cloud computing, and network services. The survey also highlights the approach to purchasing technology adopted by utility companies. The report aims to provide a better insight to ICT vendors and service providers when pitching their solutions to utility companies. The report focuses on utility companies' ICT expenditure trends for specific business areas and technologies, identifying the top three IT projects, and understanding the business challenges faced by organizations.

In particular, it provides an in-depth analysis of the following:
- How ICT budgets are set to change in 2016 in terms of their overall size
- Allocation across the core elements of IT spend, including hardware, software, services, communications, and consulting
- Distribution of ICT money in areas such as the networks, applications, service desk, and data centers
- Which ICT functions utility companies are interested in outsourcing
- Utility companies' investment priorities based on their budget allocations across core technology categories such as cloud computing, business intelligence, network services, and security products.
- Factors that are influencing utility companies' investments in each technology category
- How utility companies' IT budgets are currently allocated across various segments within a technology category
- Utility companies' distribution of their ICT budget across various segments within a technology category
- Vendor satisfaction ratings for various core and advanced technology categories
- Insight into utility companies' preferred buying approaches
- Business objectives that utility companies are looking to achieve through their IT investment strategies
- Factors that are influencing utility companies' decisions to select an ICT provider


- Understand how the utility companies ICT landscape is set to change in 2016 to prioritize your target market
- Comprehend how ICT money are being allocated by utility companies in specific geographies and size bands to improve your market penetration
- Make effective business decisions by recognizing the opportunities within each of the core areas of ICT spend (hardware, software, IT services, telecommunications, and consulting)
- Realign your sales initiatives by understanding the current strategic objectives of utility companies
- Enhance your market segmentation with the included, detailed breakdown of opportunities within selected technology categories (business intelligence, security products, cloud computing, and network services)
- Prioritize your focus areas by understanding which factors are influencing utility companies' decisions when selecting an ICT provider
- Understand the changes in customers' priorities and identify the business objectives that utility companies are looking to achieve through their ICT investment strategies

1 Trends in ICT budgets
1.1 Introduction
1.2 Survey demographics
1.3 ICT budget changes
1.4 ICT budget allocation by core technology area
1.5 Likely growth in industry-specific ICT
1.5.1 Hardware budget breakdown
1.5.2 Software budget breakdowns
1.5.3 Third party IT services expenditure
1.5.4 Communications expenditure
1.5.5 Cloud computing budget
1.6 Outsourced IT functions
2 ICT investment priorities and vendor satisfaction
2.1 Introduction
2.1.1 Cloud computing
2.1.2 Business intelligence
2.1.3 Network services
2.1.4 Security services
3 ICT procurement trends
3.1 Introduction
3.2 Business objectives influencing IT investment strategy
3.3 ICT provider selection
3.4 Key decision maker for purchasing technology
3.5 IoT investments and uptake
4 Sector-specific trends
4.1 Introduction
4.2 Business challenges
5 Summary
5.1 Utilities are increasing their ICT spending in key areas like BI and IoT, but lack a clear direction
6 Appendix
6.1 Definitions
6.2 Further reading
6.3 Contact the authors

Figure 1: Utility companies - ICT survey geographic breakdown
Figure 2: Utility companies - ICT survey breakdown by size band (number of employees)
Figure 3: Recent and expected ICT budget changes among utility companies
Figure 4: Utility companies' (external) ICT budget allocation, 2015 and 2016
Figure 5: Utility companies' growth in industry-specific ICT
Figure 6: Utility companies' average hardware budget allocation
Figure 7: Average allocation of software budgets in utility companies
Figure 8: Utility companies' average IT services budget allocation
Figure 9: Utility companies' average communications expenditure
Figure 10: Utility companies' average cloud computing budget allocation by technology
Figure 11: Utility companies' average cloud computing budget allocation by implementation type
Figure 12: Outsourced IT functions - Utility companies' current and future outsourcing priorities
Figure 13: Cloud computing - Utility companies' current and future investment priorities
Figure 14: Business intelligence - Utility companies' current and future investment priorities
Figure 15: Business intelligence - selected primary provider and vendor satisfaction among utility companies
Figure 16: Network services - selected primary provider and vendor satisfaction among utility companies
Figure 17: Security services - selected primary provider and vendor satisfaction among utility companies
Figure 18: Business objectives which influence utility companies' IT investment strategy
Figure 19: Factors influencing utility companies' decision to choose an ICT provider
Figure 20: Role of key entities in making ICT purchasing decisions
Figure 21: Primary integrator of IoT deployments
Figure 22: Plans to adopt cloud-based IoT
Figure 23: Importance of the following business challenges for utility companies

Secondary Research Information is collected from a number of publicly available as well as paid databases. Public sources involve publications by different associations and governments, annual reports and statements of companies, white papers and research publications by recognized industry experts and renowned academia etc. Paid data sources include third party authentic industry databases.

Once data collection is done through secondary research, primary interviews are conducted with different stakeholders across the value chain like manufacturers, distributors, ingredient/input suppliers, end customers and other key opinion leaders of the industry. Primary research is used both to validate the data points obtained from secondary research and to fill in the data gaps after secondary research.

The market engineering phase involves analyzing the data collected, market breakdown and forecasting. Macroeconomic indicators and bottom-up and top-down approaches are used to arrive at a complete set of data points that give way to valuable qualitative and quantitative insights. Each data point is verified by the process of data triangulation to validate the numbers and arrive at close estimates.

The market engineered data is verified and validated by a number of experts, both in-house and external.

After the data is curated by the mentioned highly sophisticated process, the analysts begin to write the report. Garnering insights from data and forecasts, insights are drawn to visualize the entire ecosystem in a single report.

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