Cloud migration 'lower priority' in UK as hardware and server upgrades climb to top of investment priorities - research

A new survey found that UK and European SMEs will up IT investment in 2023 despite concerns about rising costs

Investment in technology is planned to increase this year in almost half (44 per cent) of UK small and medium sized enterprises (SMEs), despite serious concerns over rising costs.

According to research commissioned by Sharp which surveyed 5,770 SMEs across Europe, including 502 in the UK, the biggest area of investment focused on IT security, hardware upgrades and server updates for the next 12 months.

Looking at investment levels, more than 50 per cent of UK SMEs plan to invest over £20,000 on IT this year with five per cent expecting to invest north of £100,000.

Businesses shared that they intended to invest in new hardware (33 per cent) and server upgrades (28 per cent) over the course of 2023.

This is in addition to security and business continuity (34 per cent) which were also highlighted as key areas for investment, Sharp said.

Cloud migration lower on the totem pole

Surprisingly, cloud migration was a lower priority for UK businesses (21 per cent) than SMEs in Europe, where almost a third (31 per cent) of firms planned to embark on cloud migration projects as they continue to deal with the challenges of hybrid working.

However, Sharp found that IT, education and awareness may be a specific challenge for UK SMEs to address, with implementing cyber essentials (25 per cent) and improving on business intelligence/MI (23 per cent) being amongst the top investment priorities.

SME tech investment was analysed against more general business challenges, with rising supply costs (39 per cent) and the cost of living in general (41 per cent) being of greatest concern in the UK in comparison to the rest of Europe.

Finding and retaining talent (23 per cent) and managing a diverse hybrid workforce (22 per cent) were also noted as key issues, slightly lower than the rest of Europe at 27 per cent for both.

Hybrid working challenges seen as ‘most critical'

As with other SMEs in Europe, IT security is the biggest technology challenge UK businesses feel that they will face over the next 12 months, with a third (33 per cent) highlighting security as their top priority.
Interestingly tech challenges varied between business sectors in the UK.

Hybrid working technology issues were flagged as the most critical for almost two thirds of SMEs surveyed in the legal sector (63 per cent) and for nearly four in 10 of the healthcare industry (38 per cent).

Employees' ability to use software was reported as the primary challenge for the healthcare sector (50 per cent).

"The past two years have reshaped the way businesses run, how their employees work, and expanded their threat landscape," said Sharp Europe VP of IT services, Colin Blumenthal.

"The continued shift of workloads, processes and data to the cloud and on-premises infrastructures are enabling enterprises to create a value proposition that supports a new generation of workers and will be key to hiring and retaining the best talent possible.

"It's encouraging to see that SMEs across Europe are realising the opportunities for growth through investment in IT.

"Those priority projects that will receive funding over the coming months will deliver greater efficiencies, better management of diverse hybrid workforces, and support in delivering improved IT security."