IT Budgets Increase as Businesses Add Staff

By Nathan Eddy  |  Print this article Print

Adoption of cloud services continues to rise rapidly among SMBs, while virtualization is still their top IT initiative.

IT budgets have seen the largest increase in two years as small to midsize businesses continue to add IT staff, and nearly one in three SMBs, or 31 percent, plan to hire IT staff—which is consistent with data reported for the first half of 2011, found a survey from social business networking specialist Spiceworks. Overall IT budgets in the second half of 2011 grew 9 percent compared with IT budgets for the first half of 2011—the largest increase in two years. The average annual IT budget for SMBs now stands at $143,000, up from the $132,000 previously reported for the first half of 2011.

The company’s State of SMB IT survey, which included 1,295 respondents from 95 countries, also found adoption of cloud services continues to rise rapidly among SMBs, while virtualization is still their top IT initiative. Cloud services are now used by 46 percent of SMBs, a significant rise over the 28 percent that reported using cloud services in the first half of 2011 and the 14 percent that reported doing so midyear 2010.

In addition, the survey revealed virtualization continues to dominate the SMB market. Currently, 61 percent of SMBs use virtualization, which is up from the 54 percent that reported using virtualization during the first half of 2011. Tablets are becoming more popular among SMBs, according to the survey. Fifty percent of SMBs have deployed or plan to deploy tablet devices, such as iPads, within the next six months.

"Despite market fluctuations, 2011 proved to be a great year for disruptive technologies as SMBs increasingly adopted tablet computers, cloud services and virtualization technology," said Jay Hallberg, co-founder and vice president of marketing for Spiceworks. "The results of our most recent survey show SMBs making similar strategic technology investments with expanded budgets—pointing to a stronger market for IT products and services among small and mid-sized businesses in 2012."

A recent Deloitte survey also revealed that technology investments are playing an increasingly larger role in midmarket companies’ bottom line. Business process automation and technology improvements are the two top contributing factors to the jump in midmarket productivity; new hiring ranked fifth overall. Midmarket executives also said they believe the technology driving increased productivity includes business process automation (52 percent), data analytics and business intelligence (49 percent), and customer relationship management software (30 percent).