SMBs Cautious About Tech Spending in ’09

November 11, 2008 Alex Woodie

Surprise, surprise: Small and mid size businesses (SMBs) are pulling back on IT spending plans in reaction to the economic crises. This, according to a new survey from Computing Technology Industry Association (CompTIA).

CompTIA conducted an online survey in September in which it asked 772 SMBs (companies with between 10 and 999 employees) in the United States, Canada, and England about their spending plans for technology and overall expansion in the next 12 months.

The results showed a nearly even split: 51 percent of respondents said they planned to increase spending on IT, while 49 percent said their IT spending would remain flat or decline. (In light of the sample error–which was not disclosed by CompTIA but which would have been around 3 or 4 percent with a sample of this size–the percentages are basically identical).

This represents a marked decline from a year ago, when CompTIA conducted a similar study about SMB spending plans. CompTIA’s survey from 2007 showed that 62 percent of SMBs planned to boost spending over the next 12 months, while 38 percent said their spending would remain flat or decline. Even with the sampling error factored in, that’s a hefty drop.

But it could have been worse, says Todd Thibodeaux, president and CEO of CompTIA, which is based in Oakbrook Terrace, Illinois.

“SMBs have made significant investments in technology over the past dozen years,” he says. “In the past, tech spending might have been one of the first line items slashed in a tough economy. Today, SMBs are savvier because they rely on technology for an increasing amount of their core business operations.”

Other takeaways from CompTIA’s 2008 survey: 54 percent of SMBs expect their revenues to grow by 10 percent or more, and 40 percent of SMBs plan to add new business locations.