Microsoft has released its first annual Microsoft SMB Insight Report, highlighting the business challenges and technology priorities that SMEs are facing in the year ahead.

Top technology priorities for 2009 are virtualisation, IT consolidation, business intelligence, software-as-a-service and support of remote workers.

Surveying more than 600 Microsoft Small Business Specialists based in five countries, results revealed the major concerns driving SME technology investments are declining revenues, competition from larger businesses and economic difficulties.

In response, many SMEs are focusing on IT investments that will benefit their bottom line – by reducing operating costs, improving employee productivity or acquiring and retaining customers.

The Microsoft SMB Insight Report reflects the insight of Small Business Specialists from the US, UK, Canada, France and Brazil.

Eduardo Rosini, corporate vice president for the worldwide small and mid-market solutions and partners group at Microsoft, said: “Small and mid-size businesses play a critical role in the world’s economy and are often the first to emerge from periods of economic uncertainty because of their passion, resiliency and innovation.

“The Microsoft SMB Insight Report identifies areas where technology can play a role in shaping how soon and how aggressively the small and mid-size business community reclaims financial stability.”

Other findings included an expected 20 per cent point increase this year in the number of SMEs that use software-as-a-service.

More than half of respondents anticipate an increase in the number of SME remote workers.

According to Access Markets International (AMI)-Partners, SMEs account for 90 per cent of the world’s workforce and more than half of its gross domestic product.

Steve Reynolds, managing director of AMI-Partners, said: “Historically, we have seen that SMEs have responded to economic contractions by intensifying their use of IT, both to cut costs and to defend and enhance their customer relationships.

“If SMEs respond to the current crisis as they have in the past, we can expect that a sizeable number of smaller businesses will invest in IT now to lower operating costs, boost employee productivity and increase connectivity to customers so as to reap the benefits in the years ahead.”