ANTenna Blog -- Business & E-Business

IDC has just released a study with the blindingly obvious conclusion that the downturn in the U.S. economy will have significant impact on SMB priorities and IT spending plans. What, did they think it wasn't going to make a difference?

There is some useful info in the study, called Impact of the Changing Economy on SMB IT Spending: Who is Being Affected and How? For one thing, the impact varies by company size and industry, with, 38% of small companies more likely to delay IT spending and 42% of mid-sized businesses more likely to reduce IT spending.

IDC highlighted some additional points:

• Businesses in the architecture/engineering, legal, retail, and manufacturing sectors are the most likely to delay IT spending, and wholesale, insurance, and legal firms are the most likely to reduce IT spending.


• Small and medium-sized businesses are more likely to focus IT investment on tactical projects, which deliver immediate benefits, than strategic projects.


• Cloud computing initiatives are not being driven by economic concerns, save for the small minority of SMBs that indicate that they will look more closely at hosted solutions as a result of the economy.

IDC also segmented respondents by attitude: "Fewer than 50% of SMB 2.0 firms, the most forward-looking group, are extremely or strongly concerned about the U.S. economy, compared with approximately 70% of IT Indifferent firms and 60% of Pragmatist firms."

Despite the concerns, smaller companies are still expected to grow their IT purchases faster than large enterprises, according to a statement from Justin Jaffe, senior research analyst in the SMB program at IDC: "The majority of SMBs are extremely or strongly concerned about the current and expected state of the U.S. economy over the next 12–18 months...[but] SMBs are expected to drive greater growth in IT spending than the corporate IT market overall."

Given the overall situation of radical economic uncertainty and pervasive dread that seems to be taking on a life of its own these days, the report isn't all that pessimistic.

The survey asked small businesses (<100 employees) and medium-sized businesses (100-999 employees) about "current and expected" economic conditions for the next year and a half.