Aussie SMBs to spend more on IT despite being in "survival mode": IDC

Australian small and medium businesses are expected to increase their IT spending in 2021 despite being in “survival mode”, a survey from research firm IDC reveals.

IDC in late 2020 surveyed some 1210 small and medium businesses (those with less than 500 employees) across Australia and New Zealand, with the aim of understanding their priorities, challenges and planned IT investments in 2021.

The survey found that 60 percent of the respondents are in “crisis mode” or “survival mode” following the impact of the COVID-19 pandemic.

“The impacts of the lockdowns and work-at-home directives have not only delayed projects or initiatives, but also exposed SMBs shortcomings in connectivity, support, security, and sourcing,” IDC Asia Pacific vice president of cloud services Chris Morris said.

“Business resiliency of these SMBs was put to the test as their IT systems adapted to a new operating environment.”

In spite of the tightening purses and cost optimisation measures, IDC said SMBs will continue investing in IT to modernise their existing systems and to build innovative new business models.

In the survey, some 51 percent of the Australian respondents indicated they would be spending more on IT this year. New Zealand SMBs however are not as optimistic with 43 percent of respondents doing the same.

IDC also said it anticipates increased spending in cloud, collaboration and cybersecurity solutions.

The research firm added that vendors serving the SMB market can take advantage of the increased investment, as the need for support during both implementation and ongoing management will continue as solutions evolve and increase in complexity.

“COVID-19 has challenged SMBs’ digital transformation journey beyond their capabilities. With digitalisation being the focus for ANZ SMBs in the next 24 months, these businesses will require tech and business professional services as much as technology itself,” Morris said.

“SMBs are often challenged on their levels of technology and business digital skills and increasingly reliant on their technology suppliers. Suppliers are advantaged if they can deliver what is needed. Success with the SMBs will be contingent on an understanding of their businesses and consistent trusted relationships.”