In the early part of 2007, Info-Tech Research Group (with which I'm a Research Fellow) released some remarkable data illustrating software spending priorities within Canada and the U.S.

The data shows the degree to which buyers in Canada and the U.S. are committed to allocating 2007 acquisition budgets to each category of software. The proportion of buyers indicating that spending in each category is increasing. The data has been weighted by Info-Tech's ITAM, a model illustrating total IT spending by industry and account size in each country.

A quick comparison of three advanced software categories -- content/data management applications, business intelligence (BI)/decision support applications, and application deployment tools/middleware -- illustrates an interesting discrepancy between the two North American software markets.

U.S. findings show these categories to be very healthy market segments. The three have an average budget priority of about 1.5 on a scale that ranges to 2.5 in the U.S. (vs. just 2.0 in Canada). Even more impressively, "net increases" -- the weighted value of accounts indicating that they will spend more in a category in 2007, minus those that state that category spend will decrease, divided by the total of all accounts responding to the survey -- is 20 percent or nearly so for content/data management applications and application deployment tools/middleware, and closer to 25 percent for BI. It is clear from this data that the U.S.-based organizations are investing in the capacity to address some of IT's most significant challenges: enabling rapid rollout of new applications (with application deployment/middleware tools), managing ever-increasing volumes of data (through content management), and using this data to enable more comprehensive management analysis (through BI).

Info-Tech's Canadian data tells a different story. Here, these three software categories have an average budget priority of about 1.2, and net increases are between one-quarter and one-third of the U.S. levels.

If you look at other categories, you will find areas in which spending is better aligned across the border separating the two countries: Canadian spending patterns roughly mirror U.S. findings in security software, in industry-specific applications, and in the "core" areas of operating systems and utility software and application development/maintenance tools. These types of software provide important capabilities (especially industry-specific applications), and shouldn't be overlooked. However, I'm disturbed by the discrepancy in the first three categories that I highlighted. It would appear from this data that Canadians are investing in the ability to deploy and maintain software, while buyers in the U.S. are broadening their focus to also consider how to best use the information in a business context.

It seems that wherever I turn these days, I'm reminded of the saying, "Innovation doesn't come from the application, but from the application of the application." The investment pattern shown in the U.S. data indicates that American IT management "gets it." Hopefully, next year's Info-Tech data will show that Canadians are "getting it," too, and investing in the types of applications that enable us to turn IT capabilities into business assets.

Initially posted by Michael O'Neil on IT in Canada. Reposted via agreement with IT in Canada.