SMB Tech Spend Uptick Expected

Printer-friendly version Email this CRN article

Solution providers expect technology spending among SMBs to rise over the next 12 months, driven by a number of trends, including an increasing need for infrastructure, the growing acceptance of cloud computing and the end of support for Microsoft Windows XP.

Many of the small businesses put off technology equipment spending during the recession only to find their computers' hard drives and fans now failing, said Jerry Pape, principal at Excalibur, a Bozeman, Mont.-based solution provider. There's also a drive to update systems and make the switch to faster storage interfaces to allow for speedier backup times, according to Pape.

"Small business is gearing up right now and spending," Pape said. "The amount of data that they are acquiring is for the move to solid state. It's for the move to Thunderbolt. All of that stuff has triggered a need to move to faster, more reliable platforms."

[Related: The 10 Best-Selling Laptop Brands Of The First Quarter]

Pape estimates that Excalibur has installed about $40,000 worth of Cisco Meraki cloud-based networking products in the last three weeks, about $15,000 in QNAP storage gear over the last six months, and $100,000 worth of Apple iMacs, Mac minis, MacBook Pros, iPads and iPhones  since November.

Pape said he's seeing work contracts coming in earlier than usual and added eight customers since the start of the year, bringing his total client roster to about three dozen. He said he expects Excalibur revenue to be up on that new business, but was unable to provide a revenue growth projection for the year.

Recent research from analyst firm NPD Group showed that the majority of SMB customers soon plan to make technology purchases. According to NPD's Quarterly Tech Monitor, 57 percent of surveyed SMBs said they plan to make a technology purchase in the next 12 months, up 4 percent from the previous quarter. Forty-seven percent plan to make technology purchases within three months, the survey showed.

Customers in the larger SMB market are more likely to spend on technology, NPD said. Over the next 12 months, 78 percent of companies with 50 to 200 employees and 79 percent of companies with 201 to 500 employees plan to make technology purchases, according to the survey. In the near term, 47 percent and 53 percent, respectively, plan to spend on technology within three months.

"Clearly, there's a lot going on in the infrastructure world -- the cloud, growth in networking and storage requirements," said NPD Vice President of Industry Analysis Stephen Baker. "People sometimes tend to think of those as big company requirements, but there [are] plenty of midsize companies that have to invest in those to stay relevant and competitive, and that's where a lot of the infrastructure investment is going today."

NEXT: Clients Are Now Making Up For Spending Slowdown During Recession

Printer-friendly version Email this CRN article