New Report Finds Technology Spending Rising Among Small and Medium Businesses in First Half of 2010

by Vitaly Popovich [Published on 19 April 2010 / Last Updated on 19 April 2010]

Hardware and Virtualization Technology Among Top New Investment Plans. The technology spending freeze of late 2009 is showing signs of thawing among small and medium businesses (SMBs), according to a new survey by Spiceworks™, Inc. The vast majority is seeing overall IT budgets and spending rise in the first half of 2010.
TThese findings were uncovered in the second semi-annual "State of SMB IT" technology survey of more than 1,000 IT professionals at small and medium businesses (SMBs). The survey, which is designed to investigate current technology purchasing, usage and staffing trends among SMBs worldwide, was fielded in January and February 2010 by the Spiceworks Voice of IT® market research program. Survey result highlights include:
The average IT budget climbed nine percent in 2010 to $117,200 with 43 percent of SMBs reporting budget increases. Nearly half (47 percent) of 2010 IT budgets is allocated to new hardware purchases, 34 percent to new software, and 19 percent to IT services.
80 percent of small and medium businesses plan new desktop, laptop and server purchases in the first six months of 2010 in order to refresh hardware that is on average 48 months old. Netbooks as well as tablet computers like the iPad are still not popular among SMBs, representing less than three percent of planned new mobile computer sales over the next six months.
55 percent of SMBs plan software purchases in the first six months of 2010. Top priorities include virtualization, antivirus/anti-spam, backup and recovery, and Windows 7 upgrades. A surprising new finding showed that 22 percent of SMB IT pros plan to purchase, upgrade or renew CRM applications, indicating that IT departments are becoming more involved in the CRM purchase process.
Virtualization technology continues to be very popular among small and medium businesses with 41 percent planning new or additional investments in virtualization solutions in the first six months of 2010. Existing deployments increased work

Hardware and Virtualization Technology Among Top New Investment Plans. The technology spending freeze of late 2009 is showing signs of thawing among small and medium businesses (SMBs), according to a new survey by Spiceworks™, Inc. The vast majority is seeing overall IT budgets and spending rise in the first half of 2010.

TThese findings were uncovered in the second semi-annual "State of SMB IT" technology survey of more than 1,000 IT professionals at small and medium businesses (SMBs). The survey, which is designed to investigate current technology purchasing, usage and staffing trends among SMBs worldwide, was fielded in January and February 2010 by the Spiceworks Voice of IT® market research program. Survey result highlights include:

  • The average IT budget climbed nine percent in 2010 to $117,200 with 43 percent of SMBs reporting budget increases. Nearly half (47 percent) of 2010 IT budgets is allocated to new hardware purchases, 34 percent to new software, and 19 percent to IT services.
  • 80 percent of small and medium businesses plan new desktop, laptop and server purchases in the first six months of 2010 in order to refresh hardware that is on average 48 months old. Netbooks as well as tablet computers like the iPad are still not popular among SMBs, representing less than three percent of planned new mobile computer sales over the next six months.
  • 55 percent of SMBs plan software purchases in the first six months of 2010. Top priorities include virtualization, antivirus/anti-spam, backup and recovery, and Windows 7 upgrades. A surprising new finding showed that 22 percent of SMB IT pros plan to purchase, upgrade or renew CRM applications, indicating that IT departments are becoming more involved in the CRM purchase process.
  • Virtualization technology continues to be very popular among small and medium businesses with 41 percent planning new or additional investments in virtualization solutions in the first six months of 2010. Existing deployments increased workload virtualization density from 21 percent to 25 percent over the last six months.
  • Companies are moving some hosted services in-house, with hosted services purchase plans down 15 percent in the first six months of 2010 vs. the last six months of 2010. Hosted antivirus and anti-spam services show the biggest drop from 11 percent to 3 percent purchase intent, while hosted email shows the most stability at 23 percent.
  • Currently 25 percent plan to utilize cloud computing services over the next 6 months. The main reasons cited by those holding back on cloud investments include technology, security and performance concerns. Early cloud converts are bullish, and 44 percent plan to add at least one additional cloud service in the next six months.
  • The majority of small and medium businesses (67 percent) plan to keep their IT staff the same for the first half of the year, while 20 percent plan to add new full-time staff. Companies with less than 20 employees report the strongest increase in hiring plans. The use of contractors and part-time resources will drop in 2010 vs. 2009. Only 3 percent of small and medium businesses plan to use them vs. 8 percent who did in the second half of 2010.

"The technology spending slowdown among small and medium businesses seems to be over," said Jay Hallberg, co-founder and vice president of Marketing for Spiceworks. "In the first half of 2010, bright spots are clearly seen in core technology areas, such as new hardware and software purchases. However, planned adoption of emerging technology may take some time. We will continue to watch these and other SMB technology trends carefully over the coming year."

The State of SMB IT April 2010 survey of IT professionals had 1,250 respondents from around the world in organizations with fewer than 1,000 employees. Respondents were among the 950,000 SMB IT professionals from around the world who use the free Spiceworks IT management software to manage their computer networks. The average annual technology budget of survey respondents was $117,200. For more information on this survey and for a complete list of survey results, visit http://www.spiceworks.com/voice-of-it.

To receive updates on future research, follow Spiceworks Voice of IT® on Twitter at http://www.twitter.com/VoiceOfIT or @VoiceOfIT, and sign up for Spiceworks Voice of IT® research e-mails at marketresearch@spiceworks.com.

About the Spiceworks IT Management Software
With more than 950,000 users in 196 countries, Spiceworks is the most widely deployed and fastest growing IT management application and community in the world. Spiceworks combines free network management and help desk software with a rapidly growing and active Facebook-like community of IT professionals. Currently more than 35 percent of all businesses with greater than 100 employees rely on Spiceworks to manage their IT operations. Together they support 31 million employees, manage 53 million computers and devices, and spend over $163 billion annually on technology products and services.

About Spiceworks
Founded in 2006, Spicework™ develops the first free social business application that combines systems and network management software with an online community of IT professionals to help over 950,000 IT pros and 85,000 managed service providers (MSPs) simplify everything IT. Spiceworks makes it easy for businesses to manage their networks, collaborate to solve technology problems, and find the best practices, products and services they need day-to-day. Through its Voice of IT® market research program, the company enables direct conversations with IT professionals, conducts surveys and provides insight on important technology usage, staffing and purchasing trends by small and medium businesses worldwide. Spiceworks is a privately held company headquartered in Austin, Texas with funding from Institutional Venture Partners (IVP), Austin Ventures and Shasta Ventures. For more information, visit www.spiceworks.com.

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