Global SMB IT spending to return to growth in 2010

24 Mar 2010

Worldwide small and medium-sized business spending on IT will return to growth in 2010 but a full recovery is not predicted until 2011, analyst IDC said. Spending on IT will increase 5.5pc in its 2010 to 2014 forecast, lower than previously expected.

“The downturn had a devastating impact on SMBs worldwide,” said Ray Boggs, vice-president, SMB 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 mid-size firms. Instead, SMBs of all sizes will remain cautious with their IT spending over the next several years.”

According to IDC, worldwide SMB IT spending will grow to nearly US$629.3 billion in 2014.

Despite the US$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.

Strongest growth on PCs, peripherals expected

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 7pc throughout the forecast period. SMB spending growth in developed regions will be roughly 3-4pc.

North America, Western Europe, and Japan collectively represent about 70pc of worldwide IT spending by SMBs.

“The diversity of the SMB market will continue to be one of its hallmarks,” added Boggs.

“Given that the developed regions account for the largest share of SMB spending, and the developing regions represent the greatest opportunity for market growth, the global market really becomes a ‘tale of two regions.’

“To succeed, technology providers need to develop separate strategies that address the distinct needs of companies in each of these settings,” Boggs said.

By John Kennedy

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years