While all types and sizes of business are affected by the recession,
some experts believe that small businesses will lead the way to
economic recovery. A new report from Microsoft outlines how small
businesses are expected to maintain a stronger-than-average commitment
to IT as a strategic investment to cut costs and increase sales.
Microsoft surveyed more than 600 of their Small Business Specialists
in the U.S., Canada, the U.K., France and Brazil and produced the first
annual “Microsoft SMB Insight Report”, which predicts a majority of
small and midsize businesses will maintain or increase IT spending in
The study found that the major concerns driving IT investments are
declining revenue, competition from larger businesses and general
economic difficulties. As a result, many of these companies are
focusing on IT investments that contribute directly to their bottom
line, like reducing costs, boosting productivity and getting and
“Historically, we have seen that SMBs have responded to economic
contractions by intensifying their use of IT, both to cut costs and to
defend and enhance their customer relationships,” said Steve Reynolds,
managing director for AMI-Partners. “If SMBs respond to the current
crisis as they have in the past, we can expect that a sizable number of
smaller businesses will invest in IT now to lower operating costs,
boost employee productivity and increase connectedness to customers so
as to reap the benefits in the years ahead.”
The report outlines several trends that Microsoft expects to unfold in 2009:
- Strategic IT Investments Bolster the Bottom Line. Smaller
businesses will continue to view IT as a strategic asset, a cost cutter
and a means of increasing employee productivity. Lower spending does
not imply lower value or reliance.
- Lower Budgets Mean Less
Has to Be More. Streamlining IT through virtualization or server
consolidation will increasingly be viewed as reliable means of adding
business capabilities while reducing management and overhead costs.
and Responsiveness Are Key to Customer Retention. The parallel
objectives of improving employee productivity and delivering a better
customer experience will drive SMBs to look at how they can better
leverage the collaboration, mobility and business insight tools they
already have, followed by strategic investments in these areas as
incremental return on investment is achieved.
Companies Will Increasingly Adopt Cloud Computing. More smaller
businesses will adopt cloud-based solutions as the economic climate
drives demand for solutions that are affordable and flexible and offer
financially backed service-level agreements. Smaller businesses will
remain cautious, however, and will closely evaluate the security,
reliability and interoperability of cloud-based offerings.
Together: SMBs Rely on Trusted Partners. Small and midsize customers
will turn more to vendors and value-added resellers (VARs) to help
improve their bottom lines. Expect VARs to work harder to show that
they understand SMBs and deliver more personalized communication and
greater depth of expertise as they compete for business.
Additional findings of the survey include:
- SMB IT Spending: 55% of Microsoft Small Business
Specialists forecast the same or higher spending among SMBs. However,
45% indicate lower spending levels in 2009.
Costs: Reducing staff and IT costs are most often indicated as the ways
SMB customers are surviving the economic downturn. Only 6% indicate no
change in behavior.
- Cost-Saving Technologies:
Virtualization and IT consolidation via small or midsize servers lead
the list of the best cost-saving technologies, but investments in these
areas lag their importance. Interest in SaaS generally matches its
current investment level, while some over-investment is indicated for
mobile solutions, unified communications and especially CRM.
Intelligence: Small Business Specialists believe that SMBs will
continue to have an interest in business intelligence, with 39%
anticipating an increase.
- Software as a Service (SaaS):
Small Business Specialists indicate a growth of 20% in SMB customers’
use of SaaS in 2009, from 66% in early 2009 to 86% by the end of the
- Productivity: Unified communications solutions have the highest level of demand among productivity tools.
Demand is greatest for IT security policy enforcement and data storage
among SMBs considering security and preparedness.
Workers: A majority of Small Business Specialists believe their SMB
customers will increase their remote worker base and will expand the
role/job function of remote employees in 2009.
- Reflecting this trend, over two-thirds of specialists anticipate an increase in demand for mobile solutions.
- The U.S. expects the largest increase in the role of remote workers in 2009
The full 2009 report can be found at http://www.microsoft.com/presspass/presskits/smb/docs/Microsoft2009SMBInsightsReport.doc