UK small firms spend big on IT

Small and medium sized businesses (SMBs) in the UK spent £6.07bn on IT services in 2007, up some eight per cent on 2006, research reveals.

Up to 29 per cent of the £20.26bn in IT and telecom spending by UK SMBs went towards IT services, including computing, software and networking support, and professional services, according to Access Markets International Partners.

AMI analyst Jacqueline Atkinson said: "In a way, this is not surprising, as companies need to support business operations and manage their IT infrastructures with an ever-increasing range of IT products and services.

"But it confirms that IT capabilities are expanding, particularly in the realms of security, storage and networking. SMBs need to outsource expertise in order to champion added solutions."

AMI's 2007 study of the UK SMB market also reveals that a higher percentage of small businesses (up to 99 employees) currently employ outsourced IT service providers, compared to medium businesses (100 to 999 employees).

Unlike medium businesses, small businesses in the UK do not typically have the luxury of a dedicated IT department.

This is most evident among smaller firms with fewer than 20 employees. Only one in three small businesses in the UK has at least one employee fully dedicated to managing IT service and support.

In terms of spending, software development and integration, day-to-day IT management and process management are dominant categories for SMBs in the UK.

As demand for third-party services continues to broaden, expenditure for services in other IT categories are increasing.

Total SMB spending for managed security services reached £21.27m in 2007 and storage services climbed to a substantial £196m, up some 20 per cent over last year.

"IT vendors vying to win service level agreements from SMBs must provide ease-of-mind for their prospective clients," said Atkinson.

"Service providers must have an understanding of the company's IT environment, and the mindset of the individuals influencing the purchase.

"This may include demonstrating an understanding of your clients' industries, or relieving concerns of having an outsider manage their IT."