Small Business IT Budgets Surge in First Half of 2013

Hardware purchases account for the largest share of SMB IT budgets at 39 percent, followed by software at 30 percent, according to Spiceworks' survey.

Small and midsize business (SMB) IT budgets rose 19 percent in the first half of 2013, as IT professionals reported an average yearly budget of $192,000, up from $162,000 in the second half of 2012, according to a survey of 1,000 global IT professionals conducted by Spiceworks.

Cloud usage held steady with 61 percent of SMBs using at least one service. The report found SMBs with fewer than 20 employees are most likely to deploy cloud services, and these SMBs spend 19 percent of their budget on cloud services, nearly doubling the cloud investment made by companies with 20-1,000 employees.

Hardware purchases accounted for the largest share of SMB IT budgets at 39 percent, followed by software at 30 percent, IT services at 19 percent and cloud/hosted services at 12 percent. Tablet devices showed the largest six-month increase with 42 percent of those surveyed planning to purchase new devices this year, up from 38 percent in the second half of 2012.

Server virtualization adoption continued to increase, with 72 percent of respondents now using the technology, a seven percent increase over the second half of 2012. Unlike cloud services, larger SMBs are more likely to use server virtualization than their smaller counterparts. For example, more than 80 percent of companies with more than 100 employees use the technology. The most common virtualized workloads include storage, printing and domain services, as well as security, inventory, collaboration and email applications.

"The results of our most recent survey highlight optimism among SMB IT departments and a focus on the tools and technologies IT departments need to support their growing businesses," Kathryn Pribish, Voice of IT program manager at Spiceworks, said in a statement. "SMBs account for half of all IT spending worldwide, so the results of this survey bode well for technology vendors developing the latest SMB products and services."

Fifty-nine percent of SMB respondents support tablets on their networks, up from 53 percent in the second half of 2012. The report indicated support is expected to increase to 70 percent over the next six months. Hardware purchases continue to account for the bulk of IT spending with tablet devices showing strong 12 percent y/y growth, the report noted.

However, increases in budget were more prevalent in smaller SMBs as midsize businesses with 250-999 employees reported a 13 percent decrease in budget for the first half of 2013. Only 22 percent of SMBs plan to hire IT staff in the first half of this year, a four percent decline from the second half of 2012.

A Spiceworks release noted 68 percent of respondents were from North America, 25 percent from Europe Middle East Africa (EMEA), six percent from Asia-Pacific, and one percent from Latin America. Those surveyed work in organizations with fewer than 1,000 employees and are among the more than 2.5 million SMB IT professionals in the Spiceworks database.