5 IT Spending Areas in 2010 by SMB’s

Picture Credit : Cote

Did you know?

• SMBs make up 99.7% of businesses (Source: SBA Office of Advocacy)
• SMB business recovers much faster after an economic recession

Since we are slowly coming out of economic recession, the big question is will technology help SMB rebuild their business?

After researching  2010 SMB IT spending trends, I gathered 2 insights from the IDC SMB 2010 growth predictions webcast that were contrarian but also insightful:

1) SMB IT spending is declining more than enterprise IT spending

2) Small businesses are cutting their spending more than mid-size firms. This is mainly due to decreased revenues, restricted cash flows and cancelled orders.

In simple language the economic landscape for SMB has changed.  Doing business with SMB will not be as usual. They are looking for new ways to manage their business efficiently and information technology will play a critical role to rebuild their businesses.

Last week, I also received an alert from IDC around SMB IT spending. What caught my attention in the alert was the response to the SMB survey conducted by IDC last October: “How do you feel about your country’s economy?” Over half — 56% — agreed that “Things are starting to look up.”  When the same question was asked two weeks ago the response was 74% agreeing.  This is good news for all of us!

The alert also articulated 3 relevant spending patterns. They were:

• Consider the Big Picture (Global Economy and SMB IT spending): 2010 worldwide economic forecast is showing growth of 3-4%. “IDC expects SMB IT spending growth to be similar to economic growth — 3.7%. Not dramatic, but still better than the 2.2% IT spending increase expected from large businesses and certainly better than the 4.3% decline in SMB IT spending in 2009”

• Growth opportunities in Developed and Developing markets – IDC expects two thirds of global SMB IT spending will continue to come from the developed world: North America, Western Europe, and Japan. But the greatest part of spending increases in 2010 will come from the developing world.

• Technology will be a Big Bet for SMB to rebuild their business– SMB will look for opportunities to increase employee productivity and strive to keep their business lean. To make decisions on IT spending they will perform total cost of IT ownership analysis. Technology purchase will be driven by business needs such as productivity improvements, vendor financing, tax benefits, and lower cost of IT ownership.

Based on these insights above, I think the 5 technology solutions will help rebuild SMB businesses:

• Enabling worker mobility:  Mobility solutions are here to stay. They need to offer the worker to talk and work simultaneously with their colleagues, partners and customers. These interations will be accomplished by phone, instant message, smartphone, online collaboration solutions etc.  Microsoft Office Live Communication Server is currently offering many ways to provide mobility solutions.
• Increasing employee productivity – Employees need right tools to be productive. If employee is not productive, employee morale, customer experience and new hiring will all be at stake. Here is an article that articulates 5 factors that affect employee’s productivity. For example, Cisco promoted Telecommuting to save 277 million by letting employees to work from home using company’s own virtual office technology.
• Decrease total cost of IT ownership: In most of the sales cycle and decision making process, SMB will be looking at cloud computing solutions, flexible monthly payment options, vendor financing, tax credits and green footprint to manage their business.
• Intelligent business solutions: This area will be evergreen. The real need will be to provide insightful information by integrating data sources to manage the business.
• Social Media Presence – SMB’s needs a better way to listen, interact and respond to customers and partners.  What they need is a quick and easy plan to integrate social media into their current marketing plans. A low cost solution is really preferred.

To support and capture SMB business, many technology giants are coming together. We need to watch closely how the new partnerships between Microsoft-HP , Microsoft-Intuit, Oracle-Sun, Cisco-EMC and many more will deliver new innovative solutions to help their business.

In 2010, what technology areas do you think SMB will spend?

Share your feedback and ideas.

Tagged as: 2010 Trends, Cisco, HP, IDC, IT spending, Microsoft, Mobility, Productivity, SMB, SMB Spending, Social Media