Wednesday, October 7, 2015

Who Owns Technology Spend?

I was listening to an a16z podcast on the way home about legacy businesses navigating the digital world, and I was struck by the following statistic: according to 2015 PwC's Digital IQ survey, 68% of enterprise tech spending this year is happening outside of the the IT organization. Even more striking, this number was only 32% in 2013. That's a 45% CAGR; the percentages controlled by the IT org and the rest of the business have flipped in only two years.

Since total tech spending can't be shrinking, there are two explanations.  Either the IT organization's budget is being shifted to other parts of the business; or the growth in the tech spend outside of IT must be growing even faster than 45% yoy. That's an insane growth rate and if it is correct, an insane opportunity.