As SMB Spending Rises, so Does Vendor Interest


One of the most interesting nuggets of information in IDC's new report on projected technology spending for 2008, as related in this News.com article, is its prediction that tech vendors will aggressively target SMBs in an effort to cope with an expected spending slowdown in the U.S.


IDC predicts that tech spending by U.S. SMBs will grow by 8 percent to 10 percent next year, compared to 3 percent to 4 percent for large enterprises.


While big vendors' desire to win SMBs has been there for some time, they are struggling to convert that desire into customers.


A senior VP of research for IDC believes that Google will buy Salesforce.com or Intuit in an effort to more strongly advance into the SMB market, which has shown interest in its business products such as Google Apps, Search Appliance and Custom Search Business Edition. (IDC correctly called it last year with a prediction that big software vendors like SAP and Oracle would buy business intelligence specialists.)


Perhaps testng the waters, Google and Salesforce.com reached an agreement earlier this year, in which the on-demand darlingintegrates Google capabilities into some versions of its software.


In addition to targeting SMBs, other likely moves for tech vendors include making strategic acquisitions and moving into emerging markets like the BRIC countries (Brazil, Russia, India), says IDC.


Like SMB spending, IDC expects spending in emerging markets to far outpace sluggish enterprise spending in the U.S. Because of this, big U.S. vendors may buy players like Brazil's Datasul, China's Kingdee International Software Group or India's 3i Infotech.


The just-released report was right on the money with at least one prediction, that U.S. cellular providers would open their networks, just as Verizon Wireless recently did. Hot off the wires, AT&T announced earlier today that it is opening its network as well.