Why businesses are spending more on tech despite an economic downturn

While the economy and other factors have been incredibly unpredictable in recent years, businesses continue to increase their technology investments. Cloud services and companies like RapidScale provide businesses with stability through unstable times by efficient and secure hybrid workforce management and the ability to help businesses cost-effectively scale workforces.

Posted 9:00 a.m. Mar 21, 2023 — Updated 9:00 a.m. Mar 21, 2023

This article was written for our sponsor, RapidScale

Recent history has taught two crucial facts:

No one can predict the future. People don’t know for sure what’s around the bend, medically, financially, politically, or otherwise.
No matter what happens, the need for and reliance on technology is only going to increase.

Businesses are in a situation where they must forecast, as best they can, what may happen in the next fiscal year, so they can plan for any organizational growth or cuts.

With that in mind, most businesses agree that investment in technology is a good bet. In 2021, U.S. tech spending increased 9% and is projected to hit 7.2% year-over-year growth by the end of 2022, according to research by Forrester.

"Clients must do more with less in a down economy, and technology is the best place to gain efficiencies," said Samantha Wojenski, senior director of client experience RapidScale. "Technology innovation through data analytics and automation also helps companies further differentiate in down times."

Empowering a remote workforce

This increased spending was originally fueled by the development of solutions for remote work. Companies continue to expand their online offerings as cloud services increase in versatility and utility.

"Every company has had to embrace technology regardless of how tech their end product is," said Meighan Agresta, business analyst at RapidScale, "With RapidScale, you see a really big uptick in software development with SD-WAN, which allows for more flexibility. It offers plug and play versatility and improved connectivity. You see it a lot in companies that have multiple locations. It provides a lot of flexibility."

SD-WAN is a software-defined approach to managing the wide-area network. Simplified, it is a virtual service that extends specific networks over large geographical distances.

The flexibility that SD-WAN delivers means many kinds of companies can use tech services that otherwise wouldn’t be options for them.

"It’s possible you [businesses] don’t have the expertise or resources needed to maintain IT infrastructure," said Agresta. "Security concerns, work from home connectivity, and the need to access information securely 24/7 is a primary focus, regardless of what industry you’re in."

Spending to save

Simply put, businesses that spend more on technology end up saving money in other ways because they can do more with fewer resources and employees, while empowering their remote workforces. In a review of more than 4,000 studies, reports, and articles, Global Workplace Analytics found that almost 60% of employers identify cost savings as a significant benefit to telecommuting. But, technology is a necessity to make it work.

"Teleworkers need access to company systems, software, and data," according to Global Workplace Analytics. "Infrastructure changes that support telework improve efficiency for office and traveling employees as well."

This is where Desktop as a Service, called DaaS, can help. Administrators can use it to manage onsite and offsite workloads.

"The days of managing Exchange servers are long gone," said Wojenski. "Desktop as a Service provides a lot of efficiencies and security advantages. Cloud backups are a must — especially with all the ransomware out there."

Depending on a business’s needs, RapidScale offers fully managed, co-managed, and user-managed solutions for desktop applications. The fully managed offerings eliminate the time and effort a business has to put into dealing with patches, upgrades, security, and user device troubleshooting.

"Data in cloud environments can be more secure than data on hard drives," according to RapidScale. "Virtual desktops don’t get left in a cab or broken when dropped."

Other benefits of DaaS include ongoing backups that protect against data loss, the opportunity for employees to use their own devices, the ease of adding and removing users, and a tailored approach that means every business has a customized solution designed.

Planning for long term growth

Another reason businesses spend more on technology is that doing so now can help them prepare for long term growth.

"When planning a new marketing campaign a generation ago, your first action might have been to request a meeting with a firm on 5th Avenue over a lunch of bourbon cocktails," according to the National Center for the Middle Market, a research center. "Today, you get better results by sitting down with some of your youngest software developers or your data analysts who are buried in spreadsheets of customer data."

Not only can cloud services help create growth, but, just as importantly, it can help accommodate growth. The cloud-based services RapidScale offers and helps manage allows for businesses to scale their business up or down effectively and efficiently. A smart investment for uncertain times.

Overall, spending more on technology is one of the smartest choices a business can make as it looks to the future.

"It is hard to find experts who operate small- and medium-sized businesses efficiently without cloud," said Agresta. "It’s impossible to not have that as part of your IT plan."

This article was written for our sponsor, RapidScale

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