Since the official “end” of the recession in 2009 (which appears to have primarily ended for the economists tracking it), statistics from IDC show that SMBs have increased their IT spending more rapidly than expected. Sure, access to credit is still limited. And some SMBs are still reluctant to hire new employees. But slow hiring could be a promising sign for MSPs that file IT talent gaps in the SMB market. The best news of all: research firm IDC predicts 8 million SMBs will spend more than $125 billion on advanced technology in 2011.
This marks a 4% increase from $120 billion in SMB IT spending during 2010, and IDC data indicates these two years of spending growth represent a substantial rebound from 2009, when SMB IT spending declined by 4.2%.
That’s an awful lot of IT spending by an awful lot of SMBs who do not appear to be enlarging their IT departments to keep up with the new technology coming in. And that spending represents actual hardware and software, not associated costs such as installation, integration, customization, maintenance, upgrades, etc.
From LANs to Virtualization
We’ve all heard the cloud noise. But demand for local area network (LANs) continues strong. For MSPs who offer expertise in networked environments, IDC indicates that the number of SMBs with local area networks will exceed 4.5 million by 2015, as even smaller businesses look to connect their users’ PCs.
Reflecting this trend toward connected environments, IDC expects that notebook PCs will continue to be the form factor of choice and will represent a larger share of total PC shipments into the SMB market than desktops. In 2015, the number of SMBs with notebooks is forecast to approach 4.7 million.
Furthermore, IDC predicts the declining price of entry-level hardware will drive server acquisition in small firms, while virtualization solutions motivate midsize firms to upgrade and consolidate their environments. Meaning that whether your game is rooted in physical servers or played up in the clouds, the SMB market should have plenty of technology needing managed services in order to function properly.
Filling a Big Need
In a press release, an IDC analyst advises:
“Vendors that understand how changing economic conditions and emerging technologies are affecting IT acquisition for different company size segments will have a considerable advantage in developing and marketing technology products and services for SMBs.”
In my mind, that statement should be expanded to include, “MSPs should have a considerable advantage in capitalizing on SMBs’ lack of in-house expertise in making those products and services fit into the larger IT enterprise and run properly.”
The essence of success in business is supposed to be finding a need and filling it. With 8 million SMBs needing help in making sure $125 billion worth of new technology works the way it’s supposed to, at least the finding part of the equation should be pretty easy to solve.
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Tags: IDC | SMB IT Spending | SMB Technology Spending | Virtualization Spending
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We see the same thing. SMBs are now ready to invest in their business and IT in particular. The great news for MSPs is that most of these SMBs are also looking for new ways to solve the problems. This means they are not just replacing the old Exchange server or backup application with a new one, but they are open to more efficient and cost effective solutions like Gmail or a cloud based data protection service. MSPs that make themselves experts in these solutions will have a real differentiated advantage over the ones that don’t going forward.
Mitchell Cipriano
http://www.demandbydesign.com
Mitchell: There seems to be a disconnect in the market. In recent weeks a bunch of MSPs have echoed your thoughts… They are seeing good market momentum in the SMB space. Yet Wall Street has declined for six consecutive weeks and talk of a double-dip recession among investors has grown louder. We’ll be taking a closer look at the disconnect in the days ahead.
-jp