Small businesses are getting more confident about the economic outlook and are pencilling in IT upgrades as they increase investment.

Two thirds of UK small to medium sized businesses expect their IT budget to increase in 2014, according to a survey.

According to the survey of 250 IT decision makers in companies of between 50-500 employees, one in 10 SMEs expect their IT budget to grow by more than 10 percent next year, with only five percent expecting to cut their budget.

The research attributed the expected rise in budgets to increasing optimism about the broader UK economy: 80 percent of respondents agreed that they expect their business to do better in 2014 than in previous years.

Over a third of respondents revealed that they have concerns about the limitations of their current IT infrastructure and a further 52 percent admitted that the failure of IT to deliver posed one of the biggest threats to their business next year.  

When asked what they would spend their additional IT budget on, nearly one third of respondents to the survey, commissioned by data centre company Node4, said they would invest in mobile application development, and one in five said they would move their entire IT infrastructure to the cloud.

Analyst Gartner recently published a list of technology priorities for IT departments in 2014 including mobile device management, and the development of mobile apps for staff and customers. Other areas of interest include the ‘Internet of Everything’ and evolving cloud models – for example the combination of public and private cloud services.