How Does Your Small Business’s IT Spending Measure Up? -
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How Does Your Small Business’s IT Spending Measure Up?

Is your small business struggling along with outdated hardware and software? Then you might be in danger of getting trampled by your competition. According to the new Spiceworks report The State of SMB IT, small and midsized companies are ramping up their IT budgets significantly.

Spiceworks found that the smallest companies are actually increasing spending the most. Since 2010, companies with under 20 employees have seen their annual IT budgets almost triple, from $19,000 to $54,000 on average.

Stuff, Not Staff

What are companies spending on? For the most part, it’s not staff—just 22 percent say they plan to hire IT staff in the next six months. Instead, most of the budget is going to hardware; in addition, more companies are buying new hardware rather than upgrading their existing equipment. For software, the trend is the reverse, more companies are upgrading their current software rather than buying new products.

One big growth area is cloud-based and hosted IT services. Already, over 60 percent of respondents use them, and the survey projects that figure will hit 66 percent by the second half of 2013.

In the Cloud

The smaller the SMB, the more likely they are to be using cloud services. Sixty-nine percent of SMBs with fewer than 20 employees use cloud services, compared to 55 percent of those with over 250 employees.

Not only are smaller organizations more likely to use cloud-based services, they’re also more likely to be using a lot of them. SMBs with fewer than 20 employees are running an average of 5.3 cloud-based services—more than any other category of SMB–and are also likely to be running the greatest number six months from now.

While back-end services such as Web hosting, email hosting and online backup and recovery are among the most popular cloud-based/hosted services used, end-user-facing services, such as productivity solutions, sales support and business applications, are becoming increasingly popular.

Taking to Tablets

Tablets are quickly gaining ground in small and midsized businesses. Some 59 percent of companies using them, up from 53 percent 6 months ago, and 70 percent expect to be using tablets in their business by the second half of 2013.

As tablets have taken off, smartphone adoption has hit a plateau. Some 60 percent of respondents use smartphones in business, just barely up from 59 percent in the second half of 2012 (and in some companies, smartphone adoption has actually declined). However, SMBs of all sizes expect smartphone adoption to pick up again in the next six months, reaching 68 percent of businesses. My guess is that with tablets’ advances (and their “excitement factor”) surpassing that of smartphones, more companies are currently putting their money toward these new toys while making do with smartphones they already own.

Image by Flickr user blakespot (Creative Commons)



Maria Valdez Haubrich

Maria Valdez Haubrich

Maria Valdez Haubrich is Chief Liaison Officer of GrowBiz Media, a media company that helps entrepreneurs start and grow their businesses. Visit her company’s blog at
Maria Valdez Haubrich


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