SMBs Driving the Tech Economy
No matter how the economic headlines in your region read these days, when it comes to technology spending among small businesses, a lot of industry experts agree that SMB IT spending is on the rise and will continue to increase over the next few years. If you listen to all the conflicting business news about the stock markets, unemployment or the strength of our financial institutions, this may seem counter intuitive.
However, if you break it down and take a close look at where the experts see SMBs investing their IT dollars, it’s easy to see how small businesses may be bucking the economic trends to continue making investments in critical solutions, as well as technologies that will enable them to enhance productivity.
First, let’s look at some data.
IDC projects that security technology spending by U.S. SMBs will show strong growth and exceed $5.6 billion by 2015. IDC also predicts that SMB spending on security products is expected to grow almost twice as fast as general IT spending.
The Wall Street Journal reported on a survey of SMBs conducted by CompTIA, a nonprofit advocacy group for the technology industry, which found that a third of the respondents expected to increase their IT budgets by 10 percent or more this year.
Spiceworks, the social network for IT professionals, noted in its State of SMB IT survey for the first half of 2012 that IT budgets grew 6 percent since the start of the year to an average of $152,000. That represents a 15 percent increase over the same time period last year. Spiceworks surveyed 1,498 IT professionals in 100 countries and commented that survey “results also show that SMBs are spending more on technology across the board”.
What technologies are driving this spending?
More and More Employees are Using Personal Technology in the Workplace
BYOD is making significant inroads throughout the business world. A CompTIA online survey of 500 business and IT professionals found that:
“84 percent of those surveyed use their smartphone for light work such as email or web browsing.” The survey also found that “Individuals using tablets have an even wider range of uses, including note-taking, giving presentations and using their tablet as a communications device in lieu of a phone.”
The Spiceworks survey revealed that 75 percent of SMBs currently manage and support the personal devices their employees bring to work, such as iPhones, iPads and Android phones. However, Spiceworks said that SMBs are split on BYOD, with 20 percent embracing the trend completely and 25 percent “claim it’s a headache.”
Clearly, as these devices become more broadly used for work, they need to be secured and managed with the same diligence as our legacy IT systems.
Malicious Attacks on Small Businesses
It’s not just the large enterprises that are getting hacked. SMBs also need to think about preventing system attacks and one of the ways to do that is to consider using a layered security approach to help ensure you’re protected across platforms and communications channels, such as email, web, etc. It’s not just about antivirus anymore. There needs to be increased vigilance around preventing network breaches.
In its report, IDC notes that:
“the six key security product areas—endpoint, messaging, network, web, identity and access management (IAM), and security and vulnerability management (SVM)—will all show strong growth throughout the forecast period.”
SMBs should be thinking about security protection holistically, understanding that there are solutions to help you do that. SMBs also can leverage security solutions to improve business processes, ensure regulatory and industry compliance and enhance their competitive position.
Do you align security with your strategic business objectives? Whether you are expanding operations, adding new products or services, acquiring other companies, implementing a telecommuting policy, or creating a social media presence, network and system security is critical for success.
Cloud Spending
More and more, SMBs are considering cloud computing as part of their overall technology strategy. Just some of the advantages include potential IT cost savings, higher employee productivity and IT management flexibility. Spiceworks found that cloud services are now used by 48 percent of SMBs, an increase from 28 percent during the first half of last year. It cited web hosting, email hosting, backup, content filtering and application hosting as the top five cloud services now in use by SMBs
What do you think?
Tell us about your IT spending plans. Are you among the SMBs planning to grow your IT spending in security, mobile device management, cloud or elsewhere?
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To me, this makes perfect sense. As attacks and data theft continues to rise and cloud solutions offer SMBs full corporation-size IT benefits without the need for the site space or the hired professionals, now is a turning of the page so to speak that requires smaller businesses who want to be their most competitive or on the cutting edge to enter a period of spending. This may die down in a few years as these solutions become more cost effective or the norm rather than the exception, but for right now it’s a good sector to be in to beat the recession.
SMBs drive the economy, so it isn’t a surprise they drive tech spending. Large corporations are too inflexible in anything and probably tech spending isn’t an exception. Just consider the awkward process of approval in a corporation. With SMBs is is more straightforward – you want some piece of tech, the manager signs, you get it. You don’t have to wait for months to get the approval.
Elephants don’t dance, they say. Larger corporations take time to embrace newer technologies as decision making goes through a certain hierarchy. As just like with Japan, SMBs are the drivers of the economy.
That’s why tech companies need to provide a certain price structure with the SMBs in mind. They cannot and should not market their services to SMBs as they would with bigger corporations. They have to put into consideration the limited resources of those organizations. That being said, tech companies can have smaller margins with SMBs and just market to a large number of them. That’s how the Chinese does business.
This is not really surprising. As a serial entrepreneur myself, I know that investing in technology could spell the difference in efficiency. The faster that you can do things and the more that you can focus on mission critical tasks, the sooner you could have your return in investment.
I don’t try to do everything in-house, and most often rely on the cloud as it is often cheaper at the onset, and hassle-free. It’s nice to my pocketbook. Although, I have to say that some companies are snobbish towards SMBs. Probably they feel that just because we’re small, we’re easy to ignore. We’ll think again or better yet, read this article.