Survey: SMBs Still Positive on IT Spending

Another sign of rebounding optimism in the small-business community--a report suggesting midmarket companies remain confident IT spending will increase in 2009.

According to the latest survey from Compass Intelligence on small to medium-size businesses, midmarket companies are negatively affected, but not defeated, by the current recession. The survey also asked SMBs which vendors they thought were the most "SMB savvy," with Dell, AT&T and IBM topping the list of responses.
One of the survey's key findings is that the majority of small-business IT buyers have remained positive about their IT spending during the most troubling and uncertain months of this recession, with 42 percent of those surveyed in March expecting to keep their ICT (information and communications technology) spending unchanged in 2009.
Another 20 percent expect ICT spending to increase. While this is slightly down from research Compass completed in November of last year, they predict as the economy stabilizes and the various stimulus packages do their job that midmarket companies' spirits and spending will start to rise later in 2009.
"Our research shows that roughly 60 percent of U.S. SMBs have been negatively affected to some degree by this recession, but most still expect to invest in technology this year. That's because the spirit of the American entrepreneur is not easily broken-they are a powerful force of economic recovery and, in good years, a catalyst for growth," said Compass' Chief Strategist Kneko Burney. "Understanding this uniquely indomitable spirit will help larger companies, like those in this research, tap into the massive and growing SMB market opportunity."
Computer maker Dell was ranked first in the "SMB savvy" part of the survey, scoring 185 points out of a possible 240. AT&T, IBM, Cisco and Hewlett-Packard rounded out the top five, with less than five points between top-ranked Dell and HP. Burney said while all are "fantastic companies," they approach the SMB market in different ways. However, she said Web-based learning experiences, like how-to videos and the fostering of technology-centric small-business communities, is something that is being seen in all top five companies.
Compass' report comes two weeks after a survey conducted by Glenview, Ill.-based online payroll company SurePayroll, which found 71 percent of small-business respondents are optimistic about the midmarket economy. Of those who say they are optimistic, 47 percent cited their own cash flows and revenues as their primary reason for being positive.
In addition to planned increases on IT and security spending, SMBs are taking a cue from vendors by moving toward interactive media spending, a survey by Borrell Associates finds. The report, "Main Street Goes Interactive," predicts interactive ad spending will post only modest gains-10 percent over the next five years. But the Internet has changed the entire direction of SMB marketing-midmarket companies are now investing 11 percent of their advertising on the Web, up from less than 4 percent three years ago.