SMB’s Plan to Outspend Their Bigger Brethren in 08

According to a new report from AMR Research, the main reasons for this IT budget increase are outside-in pressures such as meeting customer demand and handling increased global competition and internal pressures such as increasing efficiencies and decreasing costs.

“Growth in the SMB segment is stable,” said Simon Jacobson, senior research analyst at AMR Research and one of the report’s authors, “ … the fact is these folks have to react to an ever-changing environment of globalization which means increased competition not just locally but globally.”

The 5.3% increase is about double what large companies plan to spend in 2008, according to recent research by Computer Economics.

According to the U.S. SMB IT Spending Report, 2007–2008, currently, SMBs are focusing the majority (49%) of their budgets on applications that help them run their businesses. But applications that support innovation (25%) and growth (26%) are increasingly important as well.

“If I look IT investment priorities, customer management is the big thing right now,” said Jacobs. “Even in our CRM studies, the mid-market is what’s poised for where the customer management growth is going to come from. Within that people appear to ramping up investments for more BI (business intelligence) or performance management focused investments.”

The most strategic software investments for 2008 will be in customer management applications (18%), an investment that reflects the increased customer demand many SMBs are facing. But, according to the report, companies are planning to focus their strategic investments in business intelligence (BI) and performance management (PM) applications in 2010.