SMB IT spending too slow

The SMB sector will only account for 31 percent of all ICT spending this year, despite representing 99.8 percent of all Australian businesses, IDC predicted.

In its study "Australian Small and Medium-Sized Business Infrastructure Market 2006", the research company examined the current and future state of the SMB infrastructure, software and hardware market.

Jean-Marc Annonier, research manager, vertical markets IDC said the report SMBs were forcasted to spend $8.2 billion on IT in 2006, however he said the number should be higher.

"SMBs are willing to pay the price for services, but they can't find attractive offerings from vendors," Annonier said.

According to Annonier, the SMB service market value was predicted to decline steadily at a -2.1 percent compound annual growth rate (CAGR) over the next five years, he said.

He said the decline was due to SMBs have been left to spend money mostly on hardware and software.

"They are struggling to find a decent mid-size service provider to help them manage their growing and ageing infrastructure," said Annonier.

“There is a large gap between what enterprise and SMB spend on in this sector. I believe the lack of IT spending on services by SMBs lies with IT vendors and the way they design and market services,” he said.

The channel could play a vital role in helping vendors dish out services to SMBs, said Annoier.

He believes there are three areas in service for SMBs which vendors needed to look into.

It was important for vendors to be able to provide PC/desktop support, make software services from vendors through the channel and the transformation of hardware vendors to offer more services orientated activity, said Annonier.