IT To Shape How SMBs Reclaim Financial Stability: Microsoft

Small and midsize businesses (SMBs) have long been the backbone of nearly every regional economy in terms of gross domestic product (GDP) and employment. According to Access Markets International (AMI)-Partners research, SMBs employ 90 percent of the world’s workforce and account for more than 50 percent of GDP worldwide.

Microsoft believes that IT will play a significant role in shaping how soon and how aggressively the small and midsize business community reclaims financial stability and becomes a catalyst to help lead us out of a global recession. To get a read on how smaller companies view the role of technology in the year ahead, Microsoft gathered input from Small Business Specialists in the US, Canada, the UK, France and Brazil. The results of the company’s engagement with the Small Business Specialists Community inform the bulk its first annual report on SMB attitudes and expectations for the year ahead. The data in this report supports several key trends that Microsoft expects to unfold throughout the year:

- 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.

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- Lower Budgets Mean Less Has to Be More. Streamlining IT through virtualisation or server consolidation will increasingly be viewed as a reliable means of adding business capabilities while reducing management and overhead costs.

- Service 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.

- Smaller 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. On-premise solutions continue to offer familiarity and a predictable return on investment and will therefore increasingly be complemented with hosted and online services offerings to create hybrid solutions that bring together the best of both delivery models.

- Better 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 personalised communication and greater depth of expertise as they compete for business.

It’s clear that 2009 will present unprecedented challenges for many SMBs, but very few are in a position to simply wait out the storm. History suggests that smaller businesses will adapt and find new ways of gaining advantage in the competition over fewer and more demanding customers. IT is firmly entrenched as a strategic asset among SMBs, and these businesses are leaning heavily upon technology to help shore up the bottom line.

The relative good news is that the price of technology has remained stable or has dropped, access to credit and lease-like models is becoming more prevalent, and the level of expertise among local retailers and VARs is steadily increasing. It is truly a buyer’s market for SMBs, and they should take full advantage by establishing a relationship with a trusted advisor or a local consultant to ensure that they have a strategy in place to preserve the resiliency and independence that makes them the backbone of the global economy.

Key Findings - Trends and Attitudes Among SMBs

• SMB IT Spending: 55 percent of Microsoft Small Business Specialists forecast the same or higher spending among SMBs. However, 45 percent indicate lower spending levels in 2009.

• Reducing Costs: Reducing staff and IT costs are most often indicated as the ways SMB customers are surviving the economic downturn. Only 6 percent indicate no change in behaviour.

• Cost-Saving Technologies: Virtualisation 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.

• Green IT: Only about one-third of Small Business Specialists anticipate more green IT investment among SMBs in 2009.

• Business Intelligence: Small Business Specialists believe that SMBs will continue to have an interest in business intelligence, with 39 percent anticipating an increase.

• Software as a Service (SaaS): Small Business Specialists indicate a growth of 20 percent in SMB customers’ use of SaaS in 2009, from 66 percent in early 2009 to 86 percent by the end of the year.

• Productivity: Unified communications solutions have the highest level of demand among productivity tools.

• Security: Demand is greatest for IT security policy enforcement and data storage among SMBs considering security and preparedness.

• Remote 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.
o Reflecting this trend, over two-thirds of specialists anticipate an increase in demand for mobile solutions.
o The highest levels of growth from investment in mobile solutions/ remote workers will come from server platforms and Microsoft Exchange.