In-house software development on the rise

Companies expected to increase internal IT development budgets in 2008

Software development in-house spending increases

IT managers are increasing spending on in-house development, according to new research.

A report by analyst Datamonitor examining IT budget trends for 2007 found the largest proportion of corporate IT budgets will be spent on internal developments.

The survey of 500 IT decision makers in enterprises across the US, Europe and Australia, undertaken in the first half of 2007, reveals the majority of IT budgets have increased from last year and a high proportion are expected to increase in 2008.

Last week the Office of National Statistics included the value of in-house software in the UK national accounts for the first time, partly in response to the growth in bespoke developments. The new measurement added £8.3bn to the UK economy.

Datamonitor analyst and report author Aphrodite Brinsmead says companies spend more than a third of their IT budgets on internal development and maintenance.

‘This makes sense given the in-house team is usually the first choice to address an organisation's IT needs,’ she said.

‘This method is often used due to cost effectiveness and the fact that developments can be carried out faster due to the staff already being in place and having a better knowledge of the business.'

The report finds the majority of IT budgets have increased from last year and a high proportion are expected to increase in 2008. The largest proportion of IT spending will be on internal development.