Small Business Boosts IT Spending, Budgets

Small Business Boosts IT Spending, Budgets

Expect small business to spend more on IT and increase IT budgets this year. A new Spiceworks report on the state of SMB IT spending points to higher budgets, more focus on buying end-user hardware and IT services, but not more spending on hiring internal IT personnel. Sounds like a prime opportunity for managed services providers and cloud services providers.

Small and midsized businesses (SMBs) are boosting their IT budgets this year, and much of their spending is going to cloud services. That’s according to the most recent State of the SMB report from IT monitoring and management platform Spiceworks. The report covers the first half of 2013 and points to some key trends for the rest of the year, too. Here are the details.

Spiceworks pulled out several major findings from its look at the SMB data in the first half of the year. For instance, the average annual IT budget is now $192,000, up by $30,000 from the second half of 2012. 

The biggest budget increases are coming on the S part of SMB – companies with fewer than 250 employees. Companies with 250 to 999 employees actually showed a decline in IT spending.

But SMBs are not spending that budget on IT personnel. Rather, they are using it for new end-user hardware purchases and new cloud-based and hosted IT services, pointing to greater opportunities for managed services providers and cloud services providers.

Spiceworks reports that spending on cloud services has remained steady over the past six months with 60 percent of SMBs using them, but the company expects that to rise to 66 percent in the second half of 2013.

Meanwhile, server virtualization remains a strong trend in this market with 72 percent of respondents saying they use it, up from 65 percent in Spiceworks 2H 2012 survey.  The larger the SMB, the more likely it is to be using server virtualization, Spiceworks reports.

Tablets remain a growing part of the SMB IT picture. Fifty-nine percent of survey respondents said they have tablets on their networks, up 6 percentage points from six months ago. Spiceworks said that 70 percent of respondents plan to have tablets on their networks in the second half of 2013. And while smartphone adoption has leveled off, Spiceworks said, survey results suggest that those devices are headed for a new peak in 2013 as well.

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