Smaller businesses have fueled the rise in IT outsourcing this year due to their practice of placing operational functions on cloud platforms, according to a survey by IT research firm Computer Economics. David Wagner, vice president of research at Computer Economics, said executives at small firms have become increasingly comfortable with turning over critical IT tasks to outside companies. Wagner noted that small companies have used the cloud at a faster pace than their bigger counterparts.
The survey indicated that businesses have a tendency to outsource IT functions when the economy is weak, and executives may be anticipating an economic slowdown, thus the rise in IT outsourcing. IT outsourcing has hit a five-year high, making up 12.7% of companies’ IT budgets this year, up from 9.4% last year, the survey found. Small companies’ IT budgets for median outsourcing increased from 6% to 9.1%, while the average outsourcing budget rose from 9.2% to 16%.