IT Budgets Accelerating For SMEs: Realities Creating Headwinds

61% of India respondents cite security as their biggest challenge, which was higher than the other countries surveyed. 96% of India respondents intend to adopt artificial intelligence (AI) but more than half (54%) are worried about the impact AI will have on their jobs

Greg Keller, CTO JumpCloud

FinTech BizNews Service   

Mumbai, February 19, 2024: JumpCloud Inc., today announced the findings from its Q1 2024 small to medium-sized enterprise (SME) IT Trends Report, “State of IT 2024: The Rise of AI, Economic Uncertainty, and Evolving Security Threats”. The report found that budgets are accelerating in India, with India respondents reporting the highest overall budget increase (92%) and highest percentage reporting “up by more than 20%” at 29%. It reported lowest on budgets remaining flat, with only 8% reporting that budgets were either ‘remaining flat’ or decreasing - a positive outlook when compared to other countries surveyed.

Globally IT budgets are also up over the past 12 months, continuing the trend seen in early 2023. 82% of organizations report an increase in IT budgets and 20% report an increase of more than 20%, compared with 80% who had seen an increase in early 2023 and 13% who had seen an increase of over 20%.

India is poised for a substantial increase in its Gross Domestic Product (GDP), by an estimated $1.2-1.5 trillion over the next seven years, fuelled in part by the adoption of Gen AI technology[1] and its applications across sectors. Greg Keller, CTO JumpCloud comments: “Companies in India are fast-moving and agile. They are seeking platform-based device and identity management solutions that scale to match their growth ambitions while also helping to meet emerging compliance and security challenges. As the only vendor in the India market with an end-to-end open directory platform, delivering complete control to manage users, devices, access, and security policies, we are seeing strong interest.”

However, India SMEs have also had to navigate turbulent economic realities with the highest number of layoffs (78%) compared to the global average of 57%. Additionally, out of the three countries surveyed, India respondents who had already had redundancies were less optimistic about future layoffs (52% in India versus 24% in the UK versus 28% in USA). In fact, only 9% of India respondents had experienced no layoffs and were anticipating no future layoffs.

JumpCloud's sixth edition of its biannual SME IT Trends Report is designed to serve as a resource for evaluating the state of IT and offering guidance on where it’s headed. More than 1,200 respondents were surveyed from the UK, USA, and India. This is the first time JumpCloud’s IT SME Trends Report surveyed India, with 407 respondents taking part.

Security Threats

Overall, the top three security threats remain consistent with what was reported in April 2023. Network attacks topped the list (40%, up from 38% in April 2023), followed by software vulnerability exploits (34%, up from 27% in April 2023), and ransomware (29%, down from 33% in April 2023). In India, software vulnerability exploits topped the list (36%) followed by network attacks (35%), with multi-factor authentication (MFA) in third place (26%).

This was different to the other countries, who rated ransomware much higher than India, at 35% in the UK and 32% in the USA compared to 20% in India. India respondents say that more compliance and regulation has been mandated this year (83%) which was highest out of all three countries and higher than the global average.

Of the three cohorts surveyed, India respondents appear better prepared for cyber attacks. India respondents are more likely to offer formal cybersecurity training (74% India, 62% the UK, and 72.5% in the USA), more likely to have an IT security expert on staff (94% v 78% v 87%), more financially prepared to recover from a cyber attack (80% v 65% v 75%) and most likely to have a cybersecurity plan (87.5% v 72% v 82%).

Implications for IT Spending

Overall, IT admins are more optimistic about IT spending than six months ago – 80% expect IT budgets to increase in 2024 versus 63.5% in Q2 2023. 92% of India respondents expect budgets to increase either slightly or significantly, which is well above the global average of 80%. 55% of India respondents expect budgets to increase significantly, while this was 29.5% for the USA and 20% for the UK.

This has implications on security budgets. Sixty one percent of India respondents cite security as their biggest challenge (higher than the global average of 41%), and although they expect IT budgets to increase, India respondents are clearly worried that the proportion spent on security will fall. When it comes to the impact budget cuts will have on security spending, 58% of India respondents think their organization will cut spending, versus 40% in the USA and 25% in the UK. Likewise, cuts to security budgets were more likely to impact organizational risk when compared to other countries, according to India respondents, with 79% expressing concern.

AI Adoption

Adoption of AI is accelerating in India. Globally, organizations are actively planning for AI and only 13% of organizations do not currently have any plans to implement AI initiatives. Planned AI adoption rises dramatically to 96% for India respondents, with 31% planning to adopt AI in the next six months and 38% in the next seven-12 months. Only 4% of India respondents have no plans to adopt AI compared to 13% of USA respondents and 23% of UK respondents. Additionally, 82% of India respondents think their organization should be investing in AI, versus the global average of 76%. 82% have a policy around AI versus 63% globally.

However, while 91% of India respondents view AI as a net positive, they were more likely to agree or strongly agree that AI is outpacing their organization’s ability to protect against threats. 34% of respondents said that the organization is moving too quickly around AI, and more than half (54%) are worried about the impact AI will have on their job.

Other key findings include:

• Single solution versus multiple solutions – A large majority (75%) continue to prefer a single tool to do their job rather than several point solutions, roughly the same as the 77% who said the same in Q2 2023. A lack of infrastructure maturity may be why 81% of India respondents agreed or strongly agreed that they would prefer a single solution to manage the job.
• Number of tools – 59.5% of global respondents need five or more tools to manage the employee lifecycle and the applications they need to do their job, and 9% need more than 15. 76% of India respondents need five or more tools and 11% need more than 15.
• Biometrics, MFA and passwords – Globally, the number of organizations adopting biometrics is increasing. Two thirds (66%) require the use of biometrics for employee authentication versus 55% in Q2 2023. MFA and biometrics are very strong in India. 94% of India respondents say their organization requires biometrics for employee authentication.
• Passwords are still a big part of organizational security – 83% of organizations globally use password-only authentication for at least some IT resources compared to 91% of India respondents.
• Organizations are looking to make passwordless authentication more secure – 83% say they also require employees to use MFA to access all IT resources, compared to 93% of India respondents.

●     On average employees need to manage three to five passwords – India respondents use a higher percentage of multiple passwords than the other two regions.

●     Managed service providers (MSPs) continue to be a go-to resource for organizations globally – 76% rely on an MSP for some features. Only 7% of India respondents don’t work with an MSP at all. 93% work with an MSP, which is higher than the global average, and 5% are considering working with an MSP. 61% said that they completely outsource their IT program to MSPs.

click here for reading the full global report with all the findings.