IT Spending Plans Up Among Small Businesses: Report

A survey of IT managers in the U.S. finds 42 percent of IT budgets for the year are allocated to hardware purchases.

Planned IT spending by small to medium-size businesses is on the rise for the second half of the year, according to a survey by IT management application developer Spiceworks. Overall, IT budgets are up an additional four percent from the first half of 2010. The findings were uncovered in the second semi-annual State of SMB IT technology survey for 2010, which investigates current technology purchasing, usage and staffing trends among SMBs worldwide. The Spiceworks Voice of IT Market Research Program conducted the study of 3,011 IT professionals in July and August 2010.

The survey found budgets for the second half of 2010 increased four percent over figures reported in the first half of the year, which brings the average annual IT budget for SMBs to $121,770, up from the $117,200 reported for the first half of 2010. Virtualization investments continue to grow within the midmarket sector with 68 percent of IT professionals planning to utilize some form of virtualization by the end of 2010, up from the 63 percent reported for the first half of 2010. The survey found currently 52 percent of SMB IT professionals utilize virtualization in their networks, which is up from the 44 percent who did so at the beginning of 2010.

In line with the first half of 2010, the majority of SMB IT professionals (65 percent) said they plan to keep their IT staff the same size between now and year-end. While 20 percent plan to add full-time IT staff before the end of 2010, companies with fewer than 20 employees are most confident in their plans with nearly one in four (23 percent) planning to add new staff. This is nearly double the 12 percent of companies with 20-99 employees and the 18 percent of companies with 100 or more employees that plan to do the same.

The survey also found 42 percent of IT budgets for the remainder of the year are allocated to hardware purchases, which is down from the 47 percent reported for the first half of 2010. The majority of purchases are designated for replacing aging hardware systems, according to the report. Among SMB IT professionals, 34 percent plan to tackle server operating system upgrades before year-end. The most popular planned software purchase is antivirus/anti-spam software with 67 percent of respondents planning to buy new, upgrade or renew antivirus/anti-spam software.

While the state of the economy is still a concern among small and mid-sized companies, they continue to increase their technology spending plans," said Jay Hallberg, co-founder and vice president of marketing for Spiceworks. "Bright spots are clearly seen in strategic areas and in those that help businesses do more with existing resources. We'll continue to watch how these plans unfold over the next six months."

Overall spending on hosted IT services is down for the second half of 2010, with 48 percent of IT professionals plan to purchase new, upgrade or renew at least one IT service. This is down from the 56 percent reported for first half of 2010. However, hosted email purchase plans rose to 38 percent from the 23 percent reported for the first half of 2010. Nearly one in three of those planning hosted email purchases in the second half of 2010 will buy new services rather than upgrade or renew existing services.