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Financing: Tough Times Take a Toll on SMB IT Spending

The economic downturn is having "a potentially profound" impact on the IT priorities and spending plans of SMBs, says a recent IDC survey.

The ongoing economic downturn is having "a potentially profound" impact on the IT priorities and spending plans of small and midsize businesses (SMBs), according to a recent IDC survey of companies with fewer than 1,000 employees.

As a group, SMBs are currently expected to drive more IT spending than larger enterprises, but their specific plans vary widely based on company size, industry and other factors, IDC analysts said.

Among the survey's key findings:

  • The majority of SMBs are "extremely" or "strongly" concerned about the state of the U.S. economy over the next 12 to 18 months.
  • 38 percent of small businesses (those with fewer than 100 employees) are more likely to postpone IT spending.
  • 42 percent of midsize businesses (those with 100 to 999 employees) are more likely to reduce IT spending.
  • Architecture, engineering, retail and manufacturing companies are most likely to postpone IT spending.
  • Wholesale, insurance and legal businesses are most likely to reduce IT spending.
  • Overall, SMBs are more likely to invest in tactical IT projects offering immediate benefits than in strategic initiatives.

Source: "Impact of the Changing Economy: Who Is Being Affected and How?" IDC, December 2008.