Small Businesses Plan to Spend on Mobile, Virtualization

Wednesday Dec 22nd 2010 by Thor Olavsrud
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The most recent CDW IT Monitor finds that one-in-five small business IT decision-makers plan to invest in new small business technology in the next six months.

Despite what appears to be a sluggish economic recovery, about one-in-five small business IT decision-makers say they plan to invest in new small business technology over the next six months, according to the CDW IT Monitor.

"I think there are a couple factors that influence the optimism we're seeing among small business owners," said Tom Richards, president and chief operating officer of CDW. "The first, clearly, is the stabilization of the economy. The fact that it's not on a continual decline has given small business owners some increased optimism about their business going forward."

Richards attributes this optimism in part to recent legislation regarding small business and tax and investment incentives. And while small business can invest in a number a ways, he said that technology investments tend to offer considerable ROI.

"As [small businesses] look at making decisions about refreshing technology in their business," Richards said, "they can take the optimism they're feeling about the marketplace in general and spend incremental money on technology and get immediate returns back to their business in the short term."

Based on a bi-monthly survey conducted by polling firm Richard Day Research on CDW's behalf, the CDW IT Monitor tracks trends in IT. The most recent survey polled 1,079 IT decision-makers between Oct. 1, 2010 and Oct. 8, 2010.

Each measurement includes at least 250 IT decision-makers at companies with one to 99 employees, 250 IT decision-makers at companies with 100 to 999 employees, 250 IT decision-makers at companies with 1,000 or more employees and 250 IT decision-makers in government (at least 100 at the federal level and 100 at the state level).

The Monitor measures the outlook for IT-related spending, investment, adoption and satisfaction. It also tracks decision-makers’ assessment of IT effectiveness in meeting business objectives.

The Numbers Behind the Small Business IT Trends

The most recent CDW IT Monitor found that one-fourth of small business IT decision-makers (26 percent) expect increases in their IT budgets in the next six months, which is three percent higher than the June CDW IT Monitor and eight percent higher year-over-year.

Also, 19 percent of small business IT decision-makers plan to replace or install software for a significant part of the organization in the next six months -- a record high since the inception of the CDW IT Monitor in December 2007, according to Matt Troka, vice president of product and partner management at CDW.

Additionally, 39 percent of small business IT decision-makers plan to replace or install new hardware in the next six months. That's up three percentage points since the last CDW IT Monitor in August and the second consecutive gain for the measure.

"I think there are two areas that small businesses typically look at when thinking about how to allocate an increase in their IT budget," Richards said. "The first is mobility because it increases the productivity in their workforce in most cases." He added that with the increase in mobility comes an increase in security to ensure the data their employees access is secure and safe.

"The second area is investing in the productivity of the business itself," said Richards. We're seeing small businesses think about investing in virtualization, because it helps them increase the return on investment that they've made in previous technology like servers."

Small Business IT Trends: Mobility and Server Virtualization

Troka said that hardware-wise, small businesses are looking to go mobile. First, they want to replace or add new notebook computers. And second on the mobile plate, they want to add new devices, particularly tablets and smartphones.

Virtualization has also become a hot topic in small business computing, Troka said, though primarily that's about server virtualization in the datacenter, not the desktop.

"Virtualization is really what they're looking for in their data centers," Troka said. "There is some talk of virtualizing the desktop as well, but the cost of virtualizing the desktop doesn't always match up with what it looks like on paper."

Troka said the small business IT interest in mobile and virtualization reflect the trends in the workplace.

"People aren't just sitting in an office," said Troka. "It's really become how do you work anywhere, anytime. I think those two are indicators of changes in business. For instance, VMware is a company that has done very well, and we didn't even carry them three years ago."

Troka said CDW -- which provides technology solutions to businesses, government, education and healthcare -- has been changing its own business based on the business environment changes seen in the Monitor's results.

"We are traditionally a core-based company," he said. "And we've evolved our business. We had to ask ourselves: How do we support these different technology trends? How do we support the customers that are out there?"

He added, "We've spent a good portion of 2010 building up our resources in mobility and the cloud. We're really trying to follow the spend of the customers that are out there."

The November CDW IT Monitor also shows that small business IT decision-makers are looking to expand their staff. Five percent of respondents are planning to hire additional staff in the next six months, according to the survey results. That may seem like a small number, but Troka noted it's a three percentage point increase since June 2010.

"Technology has allowed small businesses to hire for the long term," he said. "I think a lot of businesses are getting to the point where they realize that in order to grow, they've got to add people. If you have 25 or 50 people working, and you've only got three people supporting the IT, you're going to need to add someone."

Thor Olavsrud is a contributor to SmallBusinessComputing.com and a former senior editor at InternetNews.com. He covers operating systems, standards and security, among other technologies.

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