Are budgets for data protection rising enough?

The companies’ response to the corona pandemic became a huge proof of concept for technology: Organizations had to immediately invest in digital applications, which would normally be spread over several years. However, higher technology budgets are more of a long-term trend than a short-term solution. This is reflected in the fact that companies focus on building more robust ecosystems and marketplaces. As companies become more agile and future-proof their business models, this trend towards digital disruption will continue.

Veeam Data Protection Trends Report 2022 reveals that companies are facing an emergency with data protection. The number of organizations failing to protect data is increasing. This partly explains why data protection budgets are growing faster than ordinary IT spending. But are they rising enough to fully protect business continuity?

IT costs and platform diversity are rising

According to the current Veeam survey, IT executives expect their organization’s data protection budget to grow by an average of 6%. Although estimates vary understandably, Gartner’s latest forecast for global IT spending – citing high expectations of the digital market boom – estimates growth from 2021 to be around 5% by 2022. From this, we can assume at least two conclusions: For the first growth in data protection continues, not surprisingly, on the wave of mass digitization and cloud acceleration. If one goes up, the other must grow with. Second, companies are catching up on data protection. While 6% may not feel like a significant increase from 5%, each percent represents billions of dollars. So why are data protection budgets lagging behind total IT investment?

There are two answers to that question: The first is that organizations simply cannot protect all the data they need to protect. According to our research, 86% of EMEA companies have a ‘protection gap’ between the amount of data loss allowed after an error and the amount of data backed up. The second answer is more complex because there is a causal link. There are several reasons why companies are finding it harder than ever to protect their data.

An important point is that the platforms on which companies store and use data are changing. This means that the solutions, protocols and skills required for data protection are also changing. In terms of platform diversity, we are rapidly moving towards a new standard for modern IT, with a division of 50% local servers and 50% cloud-hosted servers. Looking further, we see that within the data center there is a constant expectation for both physical and virtual platforms. Within the cloud, there is a healthy mix of hosted infrastructures with both hyperscale and managed service providers (MSPs). The main conclusion that can be drawn from these trends is that the data center is neither dead nor dying. There are still as many reasons to run a workload on site as in the cloud. In addition, data protection strategies must be suitable for physical, virtual and multiple cloud-hosted capabilities as well as for the increasingly popular Kubernetes environments.

Data protection meets SaaS

One of the driving forces behind the accelerated introduction of cloud services is the tendency for organizations to use apps as a service. The ongoing explosion of Software-as-a-Service (SaaS) is changing the dynamics of how organizations protect data. Such a nuance is the danger that IT administrators rely on SaaS applications to be equipped with native backup and recovery solutions that meet the standards of a modern data protection strategy. A good example of where such an assumption may ultimately prove costly is by using Microsoft O365. While built-in data protection features can give businesses a degree of security, implementing a third-party backup solution can give you real peace of mind. It is necessary to protect SaaS data with more than built-in backup and restore capabilities, as 48% of EMEA organizations cite accidental deletion, overwriting or corruption of data as the main causes of IT outages.

The second effect that the switch to SaaS has on data protection strategies is the massive increase in data to be protected. The acceleration of the cloud drives this trend. This partly explains why the number of companies that have identified a lack of data protection has increased by 14% in the last 12 months. To avoid widening the gap, companies need scalable data protection solutions that provide the capacity to keep up with increasing amounts of data and apps. The answer to this is cloud-based backup and data protection. Two-thirds of EMEA companies currently use cloud services as part of their data protection strategy; this will only increase in the next 12 months. In addition, the ability to protect cloud-hosted workloads of IT executives is considered to be the single most important factor purchasing enterprise data protection in 2022. In short, organizations are adopting the cloud more and they understand that they need to protect cloud data. They also plan to implement cloud-based data protection measures such as Backup-as-a-Service (BaaS) and Disaster Recovery-as-a-Service (DRaaS).

Back to the key question: are data protection budgets rising enough? The diplomatic response is that there is currently a significant backlog to catch up. The exponential increase in data volume means that there is more data to protect, while the increasing diversity of platforms means that data protection strategies become more complex. It is likely that data protection budgets will continue to exceed overall IT spending. This is because companies are gradually trying to close the gap between the amount of data that may be lost and the amount of data that they can adequately protect. Of course, using more is not the only answer. Modern data protection solutions make backup more cost effective. So they can make more backups for less money. So organizations would do well to work with a knowledgeable partner to develop a modern data protection strategy that delivers the business continuity solution within an appropriate budget.

By: Dave Russell, VP Enterprise Strategy at Veeam

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