Microsoft Survey Finds Small Businesses Spending on IT Again

A report from Microsoft examining the IT spending trends of cost-conscious businesses finds virtualization and IT consolidation high on the list of priorities.

Microsoft released the results of its 2010 SMB/Partner Insight Report, which focuses on small to medium-size businesses and their IT spending plans for the year.

In the study, based on a survey of Microsoft Small Business Specialist partners, 63 percent of respondents predicted their SMB customers will spend more on IT in 2010, up from just 25 percent in 2009, with overall SMB IT spending anticipated to rise by an average of 16 percent over 2009 levels. Results from more than 500 partners in the U.S., U.K., Canada, Brazil and India indicated SMBs view virtualization, IT consolidation, software as a service, customer relationship management (CRM) and support of remote workers as their most important technology investments.

The study indicated although SMBs remain concerned about the business climate, most will increase technology spending in 2010, highlighting the role of IT as a strategic business tool in this crucial sector of the global economy. The survey found SMBs are most likely to invest in IT that directly benefits their bottom line -- either by reducing operating costs, improving employee productivity or acquiring and retaining customers.

"The most competitive SMBs are investing in IT that will not only help protect and strengthen their business, but prepare them for success when economic conditions improve," said Birger Steen, vice president of small and medium business and distribution for the Microsoft's worldwide small and midmarket solutions and partners group. "Technology can buoy smaller businesses through turbulent times -- and which technologies SMBs choose can help determine the speed of their return to financial stability."

Microsoft small business specialists forecast customers would look to them most for help with cost-reduction measures, increasing remote management and a "one-stop" experience aligning technology with business needs. Forty-one percent of SMBs view server virtualization or IT consolidation as the best cost-saving technology, while SMBs rank software as a service among the top three technology solutions for both cost savings and business growth. Small Business Specialists said they expect to see a 19 percent increase in small and midsize customers using cloud solutions in some form.

Seventy-four percent of Small Business Specialists said they believed their customers would have more remote workers, up from 54 percent in 2009. The estimated 19 percent average increase in remote work force is expected to drive demand for mobile solutions. Most Small Business Specialists expected customer relationships to be dynamic in 2010, with just 6 percent of respondents predicting no change.

Recent industry research bolsters many of these findings and attests to the importance of SMBs to the economy. According to James Browning at market research firm Gartner Inc., the SMB market represents 44 percent of the total IT market spending. "We predict that SMBs will spend $800 billion on IT in 2010," he said. "Our research indicates that midsize businesses worldwide will increase their IT spending in 2010 by 5.4 percent over 2009 spending levels."