Small to mid-sized business IT budgets surge 19 percent

Spiceworks has announced the spring results of its bi-annual State of SMB IT survey. The survey of 1,000 global IT professionals reveals a 19 percent increase in small and mid-sized business (SMB) IT budgets in the first half of 2013, the largest increase in three years. SMB IT professionals reported an average yearly budget of $192,000, up from $162,000 in the second half of 2012. Hardware purchases continue to account for the bulk of IT spending with tablet devices showing strong 12 percent y/y growth.

“The results of our most recent survey highlight optimism among SMB IT departments and a focus on the tools and technologies IT departments need to support their growing businesses,” said Kathryn Pribish, Voice of IT program manager at Spiceworks. “SMBs account for half of all IT spending worldwide, so the results of this survey bode well for technology vendors developing the latest SMB products and services.”

The State of SMB IT survey is conducted twice annually to investigate the latest technology purchasing, usage and staffing trends among companies with less than 1,000 employees. Those surveyed are among the more than 2.5 million SMB IT professionals in the Spiceworks Community. The survey was conducted during the first quarter of 2013 through Spiceworks’ Voice of IT market insights program.

Survey highlights include:
IT budgets see dramatic jump, while IT hiring stalls
· SMB IT budgets surged 19 percent to $192,000 in the first half of 2013, up from $162,000 in the second half of 2012.
· However, increases in budget were more prevalent in smaller SMBs as mid-sized businesses with 250-999 employees reported a 13 percent decrease in budget for the first half of 2013.
· Only 22 percent of SMBs plan to hire IT staff in the first half of this year, a four percent decline from the second half of 2012.

IT hardware accounts for largest share of IT budget
· Hardware purchases account for the largest share of SMB IT budgets at 39 percent, followed by software at 30 percent, IT services at 19 percent and cloud/hosted services at 12 percent. Tablet devices showed the largest six-month increase with 42 percent of those surveyed planning to purchase new devices this year, up from 38 percent in the second half of 2012.
· Fifty-nine percent of SMB respondents support tablets on their networks, up from 53 percent in the second half of 2012. Support is expected to increase to 70 percent over the next six months.

Cloud services and virtualization have found a home in SMBs
· Cloud usage held steady with 61 percent of SMBs using at least one service. SMBs with fewer than 20 employees are most likely to deploy cloud services. In fact, these SMBs spend 19 percent of their budget on cloud services, nearly doubling the cloud investment made by companies with 20-1,000 employees.
· Server virtualization adoption continues to increase with 72 percent of respondents now using the technology, a seven percent increase over the second half of 2012. Unlike cloud services, larger SMBs are more likely to use server virtualization than their smaller counterparts. For example, more than 80 percent of companies with over 100 employees use the technology.
· The most common virtualized workloads include storage, printing and domain services, as well as security, inventory, collaboration and email applications.