Study Shows an End to SMB IT Spending Freeze

Spiceworks, the free systems management platform provider, has released the results of its most recent “State of SMB IT” survey, and they bode well for the channel. Spiceworks says that there is increased IT spending occurring in the small business market, with channel-friendly solutions like hardware and virtualization topping the list.

Spiceworks surveyed 1000 IT professionals to determine what is happening in the market (the full results can be found here). Spiceworks conducts the survey twice a year to determine trends and identify where the interest in new technologies lies. Some results from the survey should give hope to the channel that the big small business spending freeze is over.

• The Average IT budget climbed 9 percent in 2010 to $117,200. Nearly half of that, on average, is earmarked for hardware purchases.
• Eighty percent of those responding say they plan on buying new hardware to refresh old equipment coming up on 48 months of age.
• Twenty-one percent plan to invest in new virtualization technologies.

While those numbers show some opportunity for the channel, some market segments might not be so lucky. For example, those surveyed said they are spending 15 percent less on hosted solutions, showing that either the market is shrinking or margins are dropping — that is not good news for those looking to garner revenue by hosting applications or services for small businesses. On the other hand, 25 percent of those surveyed expect to invest in cloud technologies — while it’s only one- quarter of the potential market, it is a significant increase over a few years back, where the number was closer to zero.

So the news is very good for most solution providers, especially after a couple of years of a spending dry spell; however, those hoping that hosted technologies and the cloud would deliver the majority of the revenues in the future will have to wait a bit longer for really good news.