Cloud Investments Will Reconfigure Future IT Budgets

In 2012, for most CIOs, spending to maintain and operate the organization, systems, and equipment (MOOSE) represents more than 70% of their information and communications technology (ICT) budget on a cash-outlay basis. Cloud computing, along with other factors like consumerization and greater business involvement in tech spending, will bring major changes to the structure and distribution of ICT budgets. Yet most CIOs have not focused on what will happen to their MOOSE budgets as a result. Starting with Forrester's Forrsights data on the breakdown of the 2012 US ICT budget by category, activity, and function, we project how the mix of spending will change by 2016. Our analysis shows that these tech innovations will actually decrease the new project proportion of the ICT budget and increase MOOSE's share. As a result, CIOs will need to focus more attention on sourcing and vendor management to keep their MOOSE budgets under control in the coming years.