SMBs Embrace SaaS, Managed Services

Small and mid-sized businesses (SMBs) are becoming more sophisticated in their technology purchases and are embracing solutions such as software-as-a-service (SaaS) and managed services, new research from CompTIA reveals.

The survey of more than 400 SMBs across the United States found that nearly 30 percent of them plan to implement SaaS solutions in 2010 to lower costs and maintain their competitive edge. That’s up from 22 percent and 14 percent respectively in the two prior years.

Thirty percent of SMBs say they intend to implement managed services solutions in 2010. Since 42 percent of SMBs do not have a formal IT department, relying instead on workers handling IT needs on a part-time basis, the managed services model is ideally suited to fill this skills gap.

The CompTIA study also indicates SMBs are placing increasing importance on technology solutions that drive revenue, produce immediate results to the bottom line and have a direct, positive impact on the customer’s experience. This is reflected in their growing adoption of enterprise resource planning (ERP), customer relationship management (CRM) and other such solutions in 2009.

“Between 70 percent and 80 percent of the SMBs we surveyed consider the usage of ERP, CRM and online e-commerce capabilities as strategic to their business,” said Tim Herbert, vice president, research, CompTIA. “IT solutions that are tied to instant return on investment in business communication and customer outreach efforts have the highest likelihood of adoption.”

At the same time, SMBs are looking to “stretch the buck” by making better use of existing technologies, people and budgets. Though SMBs are somewhat upbeat about business prospects in 2010 – with seven in 10 expecting positive revenue growth – they also expressed a desire to keep current IT systems operational for a longer timeframe. SMBs are challenged by lean IT budgets and are looking to reduce the complexity and cost of maintaining their IT infrastructure. The inability to integrate existing legacy products and services with emerging technologies also causes them anxiety.

“Technology providers may be well advised to approach SMBs with either new IT solutions that represent low perceived risk or replacement solutions that positively impact productivity and efficiency,” Herbert said. “There’s also an opportunity to provide ongoing maintenance services to help SMBs better manage their IT systems under current business conditions.”

The CompTIA study also identified key core values that SMBs look for in their technology providers: Eighty-six percent demand partners that truly understand their business needs; and 83 percent want partners who are able to provider scalable solutions.

The survey was conducted among 409 SMBs during the fourth quarter of 2009 to determine their adoption, purchase plans, perception, mindset, spending, purchase decision making and related issues vis-à-vis IT products and services. Respondents were representative of businesses with 10-499 employees in manufacturing, finance and insurance, health care, government and other industries.