How Do SMBs Decide On What IT To Buy?

Published: April 13, 2009

by Timothy Prickett Morgan

The economic crunch is turning small and medium businesses into more savvy shoppers, as you might expect. So how are SMBs making their IT buying decisions these days?

According to research done by IDC, there is a good, old-fashioned way that is still popular: talking to people they trust about the technology they use in their organizations. Yup, despite all the good information that is available on the Internet--information that was largely unavailable 15 years ago, when the IT market was less complex--word of mouth is still a key part of the IT buying process for SMBs. But before the conversations start, IT managers do plenty of research ahead of time, so getting the word out there on the Web is very important, even if it doesn't ultimately seal a deal. And then more detailed information after the conversations are over--again out there on the Web--is what does put IT vendors in the running.

"A major challenge for providers of advanced technology products and services is how best to reach the 7.9 million SMBs in the United States," explains Merle Sandler, research manager for SMB programs at IDC. "SMBs use multiple information sources, so technology providers need to develop an effective promotional portfolio to ensure visibility in the places where SMBs turn for IT information, bearing in mind that their preferences vary by business size, vertical industry, and attitude cluster."

IDC says that both small (under 100 employees) and medium businesses (between 100 and 1,000 employees) cite word of mouth as the way they initially become aware of IT products and the vendors who sell them. But word of mouth and Web information are tied among SMBs as the place companies turn to get more detailed information when making decisions. Another thing that IDC discovered is that company size is not as important of a factor in the way SMB shops make IT buying decisions as is the industry that a company is in. SMB-sized banking and finance firms use relatively few sources of information to make their buying decisions, while those in the telecommunications and hosting space have the most sources.

If you want to get more information about this, IDC has a study available, called How U.S. SMBs Gather Information About Technology: More Sources, Greater Use of the Web in Challenging Economic Times, which you can find out more about here.

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