Worldwide SMB Spending Will Return to Growth in 2010

According to statistics, more than 90% of businesses here in the Philippines are classified as small and medium business (SMB), a small but powerful business sector of the industry – the most powerful if I may say so. They may not be as big as other companies, but by their sheer numbers, this group cannot be taken lightly or taken for granted by everyone.

SMBs are flexible, they can quickly absorb, assimilate and adapt to any change and innovate faster than larger companies. But at the same time, they are cautious. As much as they want to implement the latest technology solutions available in the market today – SMBs are not the type of companies that will automatically purchase or adapt such a solution, they will ask around and verify if others are successful with their I.T. implementation. SMBs will normally wait until prices fall or solutions are fully tested before they decide to implement them.

SMBs are vulnerable as well. Any changes in the economic situation of the country – SMB companies will feel it and might be affected by it. Like the recent recession, most SMBs hold back their acquisition plans. Uncertainties does not sit well SMBs. But in a recent study released by IDC, the extent to which small and medium-sized businesses (SMB) were adversely affected bu the global recession was greater than anticipated. As a result, International Data Corporation (IDC) forecasts worldwide SMB spending on information technology (IT) will increase by 5.5% over the 2010-2014 forecast period. This is considerably lower than previously forecast.

“The downturn had a devastating impact on SMBs worldwide,” said Ray Boggs, vice president, 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.”

Key findings from IDC’s SMB forecast include the following:

– Worldwide SMB IT spending will grow to nearly $629.3 billion in 2014. Despite the $17.4 billion spending increase expected in 2010, SMB IT spending levels will not return to 2008 levels until 2011.

– While SMB spending declines affected all categories of hardware, software, and services, the spending recovery will vary by technology type. IDC expects SMB spending on PCs and peripherals to experience the strongest growth, followed closely by packaged software outlays, while systems and storage spending will be the slowest growing.

– SMB spending growth will be strongest in Central and Eastern Europe, the Middle East and Africa, although spending will not recover to pre-recession levels until 2011. The developing markets of Asia/Pacific and Latin America will also experience growth of more than 7% throughout the forecast period. SMB spending growth in developed regions will be roughly 3-4%.

Regardless of market conditions, SMBs will be affected but they can recover faster than bigger corporations. And SMBs are starting to implement technology into their operations, we just need to go an extra mile to guide them and inform them that technology is the way to go. Let me correct myself, it’s the only way to go.

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