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    Tablet, Software Purchases to Drive SMB IT Spending in 2012: IDC

    By
    Nathan Eddy
    -
    April 4, 2012
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      Spending on information technology by the 8 million small and midsized businesses in the United States will account for approximately one-quarter of overall global SMB IT spending and more than 10 percent of all IT spending worldwide in 2012, according to a report from IT research firm IDC. The small business segment will spend nearly twice as much as the midsize segment€”and more than the entire large enterprise segment€”on PCs and peripherals in 2012.

      The client business is expected to be particularly strong, as midmarket companies look to invest in a variety of PC form factors, with particularly high levels of interest in notebooks and media tablets. SMBs will spend nearly $50 billion on packaged software in 2012, accounting for more than one-third of total U.S. SMB IT spending; this category will also have the highest compound annual growth rate (6 percent) from 2012 to 2016, according to the report.

      Although U.S. SMB IT spending has more than made up the ground lost during the especially weak years of 2008 and 2009, and is expected to exceed $138 billion in 2012, future levels of investment and spending growth will not be uniform across technology categories. More than one-quarter of total SMB IT spending in 2012 will be allocated to IT services, totaling more than $38 billion.

      €œWhile this level of spending is significant, it also represents a critical departure from the conventions of the large enterprise segment, where IT services account for nearly half of all IT spending,€ the report noted. €œIn keeping with the growing importance of IT services as company size increases, the midsize business market for IT services will be more than triple the size of that for small firms throughout the forecast period.€

      Systems and storage will continue to be the slowest-growing IT category in the SMB space. While SMB interest in servers and storage is expected to remain strong, the appeal of virtualization is expected to slow the growth of the server installed base, particularly in the midsize segment. The networking equipment category will account for the smallest share of total SMB IT spending throughout the forecast period. This represents another key difference between the SMB and enterprise segments; while large businesses continue to make significant investments in next-generation data centers and networking infrastructure, more than one-third of SMBs have not yet deployed networks. Despite increasing interest in networking and network-enabled technologies, such as software as a service (SaaS), cloud resources and unified communications, SMB spending will remain relatively modest throughout the forecast period, the report projected.

      “SMBs will account for an increasing share of overall corporate IT spending in the U.S.,” said Justin Jaffe, research manager for small/medium-sized business and home business research at IDC. “Vendors that are sensitive to the changing dynamics in SMB technology requirements as well as the critical differences in the ways SMBs and large enterprises approach IT investment will be best positioned for success in 2012 and beyond.”

      Nathan Eddy
      A graduate of Northwestern University's Medill School of Journalism, Nathan was perviously the editor of gaming industry newsletter FierceGameBiz and has written for various consumer and tech publications including Popular Mechanics, Popular Science, CRN, and The Times of London. Currently based in Berlin, he released his first documentary film, The Absent Column, in 2013.

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