SMB IT Spending Patterns Show MSPs the Way

Small and midsize businesses can be a fickle bunch. Anyone who spends any time working with entrepreneurial businesses knows they tend to be extremely sensitive to market fluctuations and often dramatically change strategy and positioning with little advance notice. But what if MSPs could gain some insight into the kinds of IT investments SMBs are planning for the rest of 2012?

In a recent webinar, IT analyst firm IDC shed some light on likely SMB IT spending behavior for the current year, and it holds a lot of potential for MSPs looking to gain new SMB clients or expand existing SMB relationships. Here is a brief overview of some of the key predictions IDC made for what could be a profitable year for MSPs serving the SMB market.

IT Spending Will Rise

IDC expects North American SMB IT spending to rise about 6% this year, from roughly $144 billion in 2011 to $150 billion. In a shift from spending patterns reported last year, IDC sees greater growth occurring among small businesses (with 100-499 employees) than among mid-sized (500-1,000 employees), so MSPs may want to pay extra attention to what smaller clients and potential clients have planned for their IT activities this year.

Cloud Adoption Will Increase, and that’s Not All

Cloud technology as an enabling technology for businesses of all sizes has gotten a lot of industry attention in the past year (including from me), and IDC predictions indicate it has been justified. Cloud adoption is expected to exceed 50% among mid-sized businesses and hit about 33% among their smaller brethren. For the most part, cloud implementations are expected to have some level of integration with onsite systems.

But cloud technology is not the only type of IT system expected to experience growth among SMB users. Spending levels on networking equipment, software and (pay attention here) IT services by SMBs are all expected to increase this year compared to last year. Other IT areas where IDC is forecasting increased SMB investment include technology for mobile and remote worker empowerment (especially driven by smartphones and consumer mobile devices), and virtualization and network resources such as enhanced storage, with security as a key enabler.

Price Will Not Be the Primary Driver

One trend which bodes well for MSPs is that solutions and productivity are expected to trump price as primary drivers for SMB technology investment. This means MSPs do not have to worry as much about enterprise vendors, telcos, and other large managed service competitors using scale to undercut them on total cost. Improving agility and competitive position should matter more to MSPs than the price tag (within reason, of course!).

Of course, these predictions are educated guesses and may not come completely or even partially true. But they give MSPs a good general roadmap to follow as they accelerate their 2012 go-to-market strategies. And anyone who serves SMBs is used to altering their sales and marketing strategy to meet unexpected changes, anyway.
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