SME IT spending decimated by recession

IDC figures reveal full impact of economic meltdown on smaller firms' technology spending

Feeling the pinch: IDC claims "the downturn had a devastating impact on SMBs worldwide"

The extent of the recession's impact on SME IT spending is only now becoming apparent, with the market not set to return to 2008 levels until next year.

This is according to research from IDC, which claims SMEs' global IT spending will grow by 5.5 per cent over the next four years, to reach an annual $629.3bn (£419bn) by 2014. The market watcher indicated this growth is "considerably lower than previously forecast".

Ray Boggs, IDC's vice president of SMB and home office research, said: "The downturn had a devastating impact on SMEs worldwide. Moving forward, small businesses will not follow the past pattern and return to pre-recessions spending levels more quickly than mid-size firms. Instead, SMEs of all sizes will remain cautious with their IT spending over the next several years."

Global spending is projected to grow by $17.4bn this year, but will still not reach the heights of 2008. The PCs and peripherals market is predicted to enjoy the most rapid growth, followed by packaged software. SME spending on systems and storage will grow at a more leisurely pace.

Central and Eastern Europe will be the top growth region, alongside the Middle East and Africa. Spending in Asia-Pacific and Latin America is projected to grow by more than seven per cent in the next four years. Growth in mature markets, such as western Europe, will be a more modest three to four per cent.

"The diversity of the SME market will continue to be one of its hallmarks," added Boggs. "Given that the developed regions account for the largest share of SME spending, and the developing regions represent the greatest opportunity for market growth, the global market really becomes a tale of two regions. To succeed, technology providers need to develop separate strategies that address the distinct needs of companies in each of these settings."