Investing in new hardware and software has been the number one priority for IT managers and chief information officers in 2011 for the first time in five years, according to a new IDC Australia report.

The yearly survey of 240 organisations which asks IT executives what their priorities are, how budgets are changing and the technology deployments they are undertaking, told a different story to previous years where keeping IT costs down was cited as most important.

In-depth: Storage virtualization buying guide.

Speaking at an AMD event in Sydney, IDC Australia infrastructure group senior analyst, Trevor Clarke, said that in 2011 IT executives were now looking to upgrade technology into a more standardised and scalable infrastructure.

"This speaks very much to the conversation around investing and trying to align what you are doing in your organisation with business outcomes, it's not just about using IT as an enabler but using it to try and get some new business benefits," he said.

This meant IT executives had to factor in return on investment (ROI) as a majority of chief financial officers in the market preferred a ROI metric over a total cost of ownership (TCO) metric, Clarke said.

"That means when you are, as an organisation, putting in place different projects and rolling out different kinds of technology deployments, you need to show that ROI," he said.

For the first time in 2011, there was an ROI expectation of less than six months for 11 per cent of the companies surveyed.

"I challenge organisations to show technology they can put in place that is going to give them a ROI in less than six months because that's a very difficult expectation to reach," Clarke said.

However, if the IT department did demonstrate a greater ROI, they would be seen as less of a cost centre by the company.

The survey also found that 30 per cent of CIOs and IT managers increased their ICT budget, 48 per cent cited their budget as flat while 8 per cent noted a decline. Some 14 per cent did not mention if they had an increase or decline.

In terms of technology deployments, 62.8 per cent of organisations were deploying server virtualization in 2011, with 16.3 per cent implementing it in the next 12 months. A further 3.8 per cent would roll out server virtualization in the next 24 months.

Turning to Cloud infrastructure, 21 per cent of respondents indicated that they were deploying it now, 24 per cent would roll out Cloud in the next 12 months and 11 per cent would implement it in the next 24 months.

"IT decision makers are interested and like the deployment models that Cloud offers them so we have up to 70 per cent of organisations telling us that they will deploy a private Cloud in the next 24 months," Clarke said.

"We also have just over 60 per cent implementing a virtual private Cloud, getting a provider to do it for them."

In addition, over 50 per cent of organisations surveyed would be using a public Cloud which indicated a number were looking at hybrid Cloud models.

Follow Hamish Barwick on Twitter: @HamishBarwick

Follow Computerworld Australia on Twitter: @ComputerworldAU