IT Budgets Set to Expand in 2025, Boosting Enterprise Software Vendors

Salesforce (NYSE: CRM), Microsoft (NASDAQ: MSFT), and other enterprise software providers are expected to benefit in 2025 as IT budgets are projected to grow. According to a survey conducted by KeyBanc, chief information officers (CIOs) anticipate a 3.9% year-over-year increase in IT spending for 2025.

The survey revealed that 71% of large companies and 82% of small businesses expect to see IT budget increases in the coming year. KeyBanc analyst Jackson Ader noted in a detailed report that the outlook for IT spending has improved compared to mid-2024. He indicated that the survey showed signs of a potential rebound in front-office applications, with budget priorities for 2025 trending upward.

Ader also highlighted key vendor trends, stating that Salesforce (CRM) is gaining higher priority among respondents, while Microsoft (MSFT) continues to lead as a dominant cloud provider and a significant beneficiary of generative AI spending, a category that saw increased budget allocations in this survey.

Salesforce remained one of the most entrenched enterprise software providers, the survey found. At the same time, Microsoft continued to solidify its position as a leading cloud vendor as more organizations migrated their data to the cloud.

Cybersecurity and Analytics Vendors Gain Ground

The survey also highlighted strong performances from vendors in cybersecurity and data analytics. Snowflake (NYSE: SNOW) ranked as the top independent data and analytics vendor among respondents. In the cybersecurity space, CrowdStrike (NASDAQ: CRWD) and Palo Alto Networks (NASDAQ: PANW) were among the highest-rated vendors. Notably, CrowdStrike did not report any customers migrating following its summer outage. MongoDB (NASDAQ :MDB) also received strong feedback as a strategic analytics provider.

Increasing Budget Scrutiny and Pricing Trends

Despite the anticipated rise in IT spending, 62% of respondents indicated that budget scrutiny is also intensifying, requiring vendors to demonstrate clear value for their solutions.

When examining pricing practices, Microsoft, Oracle (NYSE: ORCL), and Salesforce were identified as the most aggressive vendors in raising prices, according to the survey.

As IT budgets grow and businesses prioritize investments in cloud computing, generative AI, and cybersecurity, enterprise software vendors are well-positioned to benefit from the increased spending in 2025.

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