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Europe: Small Biz IT Spend To Grow
2001-04-01 admin
Investment by European small and medium-sized businesses in IT will increase by 2004, say IDC
2 April 2001, 2 pm GMT
Investment by European small and medium-sized businesses in IT hardware, software, and services is set to increase between now and 2004, driven by an increase in spending on new technology.
SMBs have previously been slow to spend on new technologies, but this is set to change. Providers have now recognized that existing products are unsuitable for SMBs and are
looking to change their offerings to cater to this potentially massive market.
IDC forecasts growth of 11.6% in spending by small companies (less than 99 employees) and an increase of 12.1% by medium-sized enterprises, compared with growth of 10.9% for large companies.
"SMBs are generally cautious about implementing new technologies given their
limited capacity to deal with disruption," said Peter Mazzi, senior analyst with IDC's Small and Medium Business research. "The lack of flexibility of existing products to match specific company requirements and the general hype surrounding the Internet have therefore discouraged SMBs from investing." These smaller companies are now lagging in the uptake of advanced technology heavy investment in 2000 by the corporate sector (500+ employees) has so far only been matched by a small number of high-tech SMBs.
According to IDC, SMB market growth through 2004 will be driven by the availability of new, easy-to-use, and comprehensive products. At the same time, as the Internet expands and becomes more widespread and established, an
increasing number of SMBs will be willing to harness the latest technologies, driving heavy IT investment. The SMB market now has the potential to be the engine that drives the IT industry in Europe.
IDC believes application service providers (ASPs) are expected to eventually
play an important role in the uptake of ebusiness technology by SMBs.
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