Most SMBs To Kickstart IT Spending In 2010

New research has shown that small to medium-size businesses (SMB) are more likely to spend money on PCs this year, than on any other major IT hardware category

This is according to leading market research company The NPD Group’s SMB Technology Report. It finds that more than three quarters (77 percent) of SMBs plan to spend more, or about the same, on new PC equipment in 2010 versus what they spent in 2009.

Overall, 41 percent of SMB PC purchases are expected to go through manufacturer direct channels, a percentage that remains consistent regardless of firm size. The report noted 43 percent of under-50 employee firms intend to use retail or ecommerce channels for their PC purchases. However, the report found with larger firms that share moves towards value added resellers (VARs) and national resellers. NPD reported more than 40 percent of purchases in firms with more than 50 employees are likely to use those channels.

Economic Stabilisation

Perhaps indicating an economic stabilisation within SMB IT departments, only 23 percent of firms planned to reduce PC spending this year. However, NPD’s report found on average firms plan to spend about 32 percent less on other hardware categories such as storage, networking, servers, and printers. And while PCs had the largest proportion of steady or increased spending, storage equipment has the biggest upside in terms of spending potential with 37 percent of firms planning to increase spending in 2010 versus 32 percent of firms spending additionally on PCs.

“PCs are clearly an important target for corporate spending in 2010,” said Stephen Baker, vice president of industry analysis at NPD. “Continuing to maintain and upgrade technology was cited by 70 percent of PC buyers as a key consideration for SMB buying in 2010 after cutting back in 2009. And since most of the pause in buying came from larger firms, 80 percent of firms with more than 200 employees intend to buy PCs in 2010 to help maintain their corporate infrastructure.”

Who Is Buying?

By company size, 75 percent of companies with 50-100 employees plan to buy PCs this year, the report found, while only 60 percent of companies below and above that size (up to 1000 employees) plan to buy. Thirty-eight percent of companies that say they plan to reduce PC spending this year are doing so because of budget cuts, and another 18 percent sited staff reductions. NPD said both percentages are nearly double the total IT hardware market average for each category.

PC purchasing is being accelerated by 51 percent of SMBs to support new growth opportunities, and 41 percent are using increased PC purchases to support new hiring, the report found. Overall, 73 percent of firms surveyed said they plan to buy PCs. The online survey, which fielded responses from 250 IT decision makers and influence PC, printer, networking, storage, and server purchasing decisions, represented firms with less than 1000 employees.

“Almost 80 percent of companies with more than 200 employees planned to spend on PCs as part of a long-term plan to upgrade equipment, a clear sign that Windows 7 is creating interest in larger firms,” Baker said. “Conversely, only 65 percent of firms with less than 50 employees intended to upgrade for that reason. The bottom line then appears to be that sales will begin shifting to larger companies in the PC arena in 2010 as some portion of corporate budgets begin to be spent on new client systems.”