SMBs Are Still Stingy with the IT Budgets, Says IDC
April 12, 2010 Timothy Prickett Morgan
The economy may be on the mend here and there in the world, but apparently small and medium businesses are waiting to see things get a whole lot better before they get their checkbooks out and start spending like it was 2008 on IT goods and services.
Researchers from IDC has radically lowered their forecasts for IT spending at SMBs, and now say that between 2010 and 2014, IT spending among this class of companies, which are conservative by nature, will only grow by 5.5 percent.
“The downturn had a devastating impact on SMBs worldwide,” explained Ray Boggs, vice president of small/medium business and home office research at IDC. “Moving forward, small businesses will not follow the past pattern and return to pre-recessions spending levels more quickly than midsize firms. Instead, SMBs of all sizes will remain cautious with their IT spending over the next several years.”
The way the situation is now, IDC expects that IT spending among SMBs will rise by $17.5 billion in aggregate this year on a global level (up from $579 billion last year), but it will take until 2011 until spending on IT at SMBs matches 2008’s levels. By 2014, IT spending for hardware, software, and services is expected to account for $6.29.3 billion, only 5.5 percent higher than the $596.5 billion in expenditures expected in 2010. Fast-growing economies in Latin America and the Asia/Pacific region will see IT spending among SMBs rise by 7 percent, while the developed economies in the West will be lucky to see 3 or 4 percent growth in spending among small and midrange firms. These developed economies in North America, Western Europe, and Japan represent about 70 percent of total IT spending by SMBs in the world. So when they stagnate, it really hurts, and even fast-growing economies in the developing world can only assuage it some.