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Tuesday, August 26, 2008

Caution About the SMB Tech Spend Upside

According to IDC, there's more concern about the economy among SMBs worldwide than interest in the most innovative technology. Current economic growth and business conditions are by far the greatest concern for SMBs, particularly in North America, Latin America, and Western Europe.

"While the growth of SMB investment in technology will continue to outpace spending growth in larger firms, economic and business conditions are on everyone's mind," said John Roberts, research manager for Global SMB Research at IDC.

"Despite the global slowdown, SMBs across all regions need to look ahead to when the global economy rebounds. Most still have a near term focus, with only modest interest in technology areas that have been getting a lot of attention elsewhere."

IDC's regional SMB analysts assessed the current level of interest in five areas -- (1) future economic growth and business conditions, (2) green technology, (3) software-as-a-service (SaaS), (4) virtualization, and (5) use of the Internet as a key business resource.

While there are differences across regions, SMBs in general are currently cold (or showing little interest) when it comes to new and emerging technologies but are considerably warmer (or showing a great deal of interest) when the discussion turns to economic issues.

IDC's key study findings include:

- There are a myriad of factors that could raise, or in some cases lower, the future level of interest or concern among small and midsize business owners when it comes to the economy as well as new technologies.

- In general, smaller companies across regions are more tactical and near-term in their concerns, but this view is increasingly shared by mid-sized firms as times grow more challenging.

- Among the four key technologies examined by IDC analysts, use of the Internet as a key business resource was considered having the greatest upside potential in terms of future interest among SMBs.

- Virtualization and green technology are not yet registering with SMB owners except in more advanced medium-sized businesses across regions. Software-as-a-service (SaaS), in contrast, has a somewhat higher level of current visibility, although interest is still at an early stage.

- IDC expects temperature increases in virtualization and SaaS the next 12-24 months as vendor promotions gain traction. Going green will be a much tougher sell, especially in underdeveloped areas, and IDC analysts do not expect temperature readings to change much in the future.