Look at how SMBs spend, not just how much

Tech spending and adoption of certain technologies among small and medium-sized businesses (SMBs) is becoming increasingly important to solution providers, but a recent report by IDC Canada suggests that what they’re spending on is more critical than the numbers alone.

According to the Canadian Small and Medium-Sized Business IT forecast for 2011-2015, released last week, tech spending among SMBs will likely reach about $10 billion in Canada this year.

“That’s about 700 million more than what I had reported in the forecast the last year,” said Paul Edwards, IDC Canada’s research director for SMB and channels, who authored the forecast.

But what they’re spending on has changed and the channel should be prepared, Edwards said. More of the spending is toward IT services and applications, he said.

“One of the absolute trends is their requirement for the technology to have a positive impact on their business outcomes [and] on their business imperatives,” he said.

“Because that’s what a lot of these companies are looking for, the partners themselves have to be able to position themselves in a business consulting type role.”

“It’s all around understanding the business and being able to direct them specifically around a solution that meets the needs of the business,” Edwards said. “They do want to now start to use technology to have an impact on their business as opposed to being up and running and operational,” he said.

IDC is forecasting low or negative growth on hardware spending, which includes PCs, which is where most of the spending among SMBs typically has been, he said. Research firm Gartner Inc. also reported this week that PC sales aren’t likely to grow as quickly as it had previously predicted.

The hardware category doesn’t include devices like smartphones and tablets, though, which are experiencing growth, though not at a very high level, Edwards said. The growth rate for networking hardware is also relatively high, he said.

“There is a much bigger adoption expectation around public cloud for SMBs,” Edwards added. “This is a big trend that channel partners need to start embracing.”

SMB spending represents 27 per cent of overall tech spending in Canada, Edwards said. Between now and 2015, SMB spending likely won’t reach where it was pre-recession, he said.

Global SMB tech spending is expected to increase to more than $471.3 billion this year, according to another recent IDC report.

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Jim Love, Chief Content Officer, IT World Canada

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Harmeet Singh
Harmeet Singh
Harmeet reports on channel partner programs, new technologies and products and other issues relevant to Canada's channel community. She also contributes as a video journalist, providing content for the site's original streaming video. Harmeet is a graduate of the Carleton University School of Journalism.

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