SMB IT Spend Growth at 5.2 Percent in 2010, Report Predicts

Cost-conscious businesses in emerging markets are more likely to increase IT spending in 2010 than their mature market counterparts, a Techaisle study finds.

Small to medium-size businesses (SMBs) are expected to spend $444 billion globally on IT products and services in 2010, exhibiting a growth rate of 5.2 percent from 2009, according to a report from market research company Techaisle. The company's research concluded SMBs are widely considered to be a growth engine for IT vendors. However, the looming possibility of a double dip recession in the United States and other economies seems to be putting the skids on this growth market.
The report, which the company said will be available for pay-per-download from its MarketViewPortal by Sept. 1, found within SMBs, the 50-99 employee size category, is likely to grow the fastest, at 7.9 percent, while the biggest spenders will be the 100-249 employee size category at $100 billion. "The silver lining is the emerging market countries where IT spending by SMBs will show a growth rate of 8.2 percent in 2010 over 2009," the report noted.
Among the emerging market countries, BRIC country SMBs will spend $45 billion on IT in 2010. Besides Brazil, Russia, India and China, other emerging market countries with relatively higher SMB spend will be Mexico, South Africa, Poland, Malaysia, Argentina, Turkey, Indonesia, Czech Republic, Thailand and Philippines, the report predicted.
"An interesting point to note is that computing hardware among emerging market SMBs will form a whopping 56 percent of the share of IT spend as SMBs are still at an early stage of adopting IT and are the lowest rung of IT building blocks," the report said. "At a global level, share of computing hardware is expected to be 34 percent while software will be at 19 percent."
Additionally, the research indicated traditional IT spending among SMBs is slowing in mature markets. "With already a heavy adoption of basic technology completed, growth areas would be cloud computing but spend levels will be low," the report predicted. "However, the emerging market SMBs are still at an early stage of adopting basic computing technologies."
The Techaisle findings support recent research by AMI-Partners. Their World Wide Cloud Services study indicated SMBs are rapidly adopting a variety of cloud services consistent with their stated intentions over the past 12 to 18 months. The study concluded with the economic situation still in a state of flux particularly across North America and Europe, cloud services are well-positioned as a cost-effective strategy that not only reduces costs but also enables greater SMB agility.