It is a small world after all

Smaller businesses that comprise most business activity in the UK suffered in this recession but are looking to spend on IT again, Fleur Doidge finds

Mucklow: SMEs may benefit more from easily customisable, niche apps

With SMBs representing 99 per cent of UK businesses and the public sector seeing cuts, targeting smaller businesses is becoming more important for the channel.

Market analyst IDC says businesses around the globe with fewer than 500 staff were hit harder than larger firms in the latest downturn, contrary to previous recessions. SMBs this year must balance preservation of capital and survival against investment to increase growth.

Raymond Boggs, vice president for SMB and SoHo research, says that SMBs, particularly in Western Europe, will not soon return to spending the amounts on IT that they had in 2008.

Even though they are starting to spend again this year, they will only probably spend 1.9 per cent more than in 2009. Last year, SMBs worldwide spent $491.4 billion (£337 billion) on IT, down 4.3 per cent from the previous year, with EMEA spending 48 per cent of it.

“Global SMB spend in 2010 should reach $509.6 billion, up 3.7 per cent in 2009. But we are covering that ground that we lost from 2008. But it will be more modest in various regions,” Boggs said.

Guiliana Folco, research vice president in IDC’s European industry solutions arm, said that British and French SMEs particularly are likely only to spend 1.2 per cent more than in 2009.

Across Europe, any increased SME spend would be primarily on software and IT services, with hardware spend also increasing but less strongly.

“With hardware, we expect some replacement of PCs and for networking – although the total growth in that area will not exceed one per cent,” she said.

Boggs said SMB tech refreshes have been delayed but will now happen, especially as smaller companies go to Windows 7. Peripherals sales should also do well.

“We see new productivity tools being embraced to support remote workers and alternative work styles. Improving broadband access and mobility will be critical,” Boggs said. “We are looking at upstream broadband speeds developing. ”

Smaller companies will adopt increasingly complex mobile solutions. To cope, as well as improve efficiencies, they will look at cloud computing and Software as a Service (SaaS).

Changes will need supporting with improved infrastructure, he added.

“There will be a new focus on solutions, productivity and near-term benefits,” Boggs said.

UK tech lobby group Intellect estimates there are some 4.81 million private sector enterprises in the UK. SMEs are 99.9 per cent of all enterprises, 59.4 per cent of private sector employment and 50.1 per cent of private sector turnover in the UK.

Guy Mucklow, managing director of Postcode Anywhere, was recently appointed to the board of Intellect, where he will represent SME interests. As an SME that also serves many SMEs, he has a perspective on SME imperatives.

“They are looking for technology that enables them to do more with less,” Mucklow said.

SMEs are interested in cloud, SaaS and similar but they have to be geared to SMEs’ resources and needs. Easily customisable niche apps could get more traction than big ‘names’, he suggested.

“We use [web-based] Basecamp for project management, and Google Docs for planning purposes. And we use iContent for e-shots and those things are integrated – or will be – into our apps,” said Mucklow.

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