SMBs to Continue to Spend in an Economic Downturn, with Slight Caution in Tech

Paul Mah

Even amid the sombre mood brought about by the current economic climate, SMBs are hopeful that their business will grow over the next year. This is based on a Web-based survey of 772 SMBs conducted in September 2008 by the Computing Technology Industry Association (CompTIA). Indeed, it seems that the majority of them intend to hire new employees over the next 12 months; about half are anticipating revenue growth of at least 10 percent or have plans to add new business locations. These SMBs are more cautious in terms of information technology and communications spending, though. About 49 percent expect their tech spending to remain flat or decline, compared to 38 percent who said the same in last year's study.

 

The lowered projections in CompTIA's survey actually link up well with IDC's revised forecast, which predicted that worldwide IT spending will just grow 2.6 percent in 2009, down from 5.9 percent pre-crisis.

 

I think the silver lining here is that SMBs will continue to spend in spite of an economic downturn, which analysts say is the first ever (or most severe - depending on how pessimistic you want to be) since World War 2.

 

And the reason behind that? Todd Thibodeaux, president and chief executive officer of CompTIA, offers a clue. He notes that, "In the past, tech spending might have been one of the first line items slashed in a tough economy. Today, SMBs are savvier because they rely on technology for an increasing amount of their core business operations."

 

So there you go: SMBs are now more reliant on technology to grow their business than in the past. The fact is they have to continue spending on IT because their business relies on it, especially if they intend to grow their business despite the naysayers.


 

Having said that, SMBs will need to carefully watch where they place their money - especially if they intend to keep to their lower budgets. This is where I will try my best to help you. In fact, a number of exciting developments and technologies are being announced that will benefit SMBs looking to reduce unnecessary capital outlay.

 

Stay tuned as I walk through them with you next week.



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