The amount SMBs spend on services and software is set to eclipse hardware spend in 2019, according to IDC.
Research from the analyst claims that while hardware is currently the biggest area of technology investment for SMBs, spending on software and services is set for stronger growth over the next four years, which will take them both past hardware spend.
IDC breaks down the technology spend of SMBs into four key areas: business services, software, IT services, and hardware.
The market watcher said that over a five-year period from 2016 to 2021, business software will see the largest growth at 7.1 per cent, followed by IT services and then software at 6.9 per cent and 7.1 per cent respectively.
Hardware is set for the smallest growth at 1.8 per cent.
"SMBs will spread their IT investments about equally across the three major categories," the report stated. "These categories [account] for more than 85 per cent of total SMB technology spending worldwide.
"While hardware purchases currently represent the largest share of this spending, IDC expects 2019 to be the watershed year when software and IT services spending both surpass hardware spending.
"The smallest of the major categories, business services, will see the greatest spending growth of the four technology categories."
North America will represent the largest SMB market through 2017, worth $171.3bn (£131.3bn), with western Europe and APAC following.
"The western European SMB market is big and growing, even if European SMBs traditionally show a lower level of IT sophistication than their bigger counterparts and therefore they can represent a difficult target market," said IDC research manager Angela Vacca.
"In this context we see today the rise of SMBs that were born in the digital era, that are very innovative and attracted by third-platform and innovation accelerators - particularly cloud, mobility, and IoT.
"Even if these companies represent only a small percentage of the overall SMB market, they can set the scene and pave the way to a broader adoption of innovative IT solutions."
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