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Compliance: IT Budgets Maxed Out by Cost of Regulations
Because milliseconds can mean money, many financial services companies spare no expense when it comes to IT. In the big picture of things, money spent on getting the best equipment and IT personnel is small compared to the total potential revenues that financial companies could earn.
It comes as no surprise then that Gartner estimates that financial services companies pay out 25 percent of all monies going to buy new server equipment. Communications companies trail in second place at 13.5 percent, and Government spending comes in at a close third place with 11.5 percent. Financial services have been the leaders of this annual survey for a very long time.
Gartner defines ‘financial services’ to mean investment, banking and insurance companies. The 2006 tab for a typical financial services company for servers was $13.2 million. That includes new server hardware and upgrades.
This year the breakdown of the server spending allocation was skewed upwards towards data storage. The reason? Sarbanes-Oxley, HIPAA, Sec 17a-4, and other compliance-related regulations. These laws require vast amounts of information to be stored and made easily searchable.
The survey found that IBM leads the global server market with 44.6 percent market share in 2006, with 26.6 percent for HP and 9.2 percent for Sun. Sun reported the highest rate of growth, 26.3 percent, fueled by great sales of their multi-core Niagra machines and interest in their Open Source Solaris Operating System, a good competitor to Linux.
