Report: SMEs increasingly tech-savvy

Small and medium-sized enterprises (SMEs) are increasingly willing to spend on technology and dedicated IT personnel.

Small and medium-sized enterprises (SMEs) are increasingly associating IT with growth.

Even at small companies with fewer than 10 people, one in five now says it has its own IT department, according to research out today from the Institute of Directors and Dell. That is part of the good news - for user organisations and vendors - and in general SMEs of up to 250 staff generally employ a number of IT professionals.

However, vendors trying to tap this market still face challenges around the person that makes the purchasing decision as well as around how SMEs pay and security.

It is not always the IT department or IT person that makes the spending decision. The survey of 562 IoD members found in 31 per cent of cases the MD makes the buying decision, while 12 per cent of the time it is the FD.

Where there is an IT director, 19 per cent said that person has that privilege and just 2 per cent of the time an IT manager or IT department gets to splash the cash.

The good news for vendors is that purchases are very often in cash. Jim Norton, senior policy advisor for E-business and E-government at the IoD, said: "SMEs bring hard-nosed realism, a 'show me the benefits' approach. But if vendors prove [something worthwhile], they'll buy it and often pay cash."

Taking the leasing option
However, Dell UK VP and GM Bill Rodrigues would like to see more SMEs leasing kit as well as buying it outright.

"When a user leases it means they have a technology refresh option. They know they can make changes," he told "It helps them stretch their dollar."

But it also makes them a potentially more lucrative customer, as other vendors with less profitable core business have found out in recent years.

And it would seem SMEs aren't afraid of modern technology. The research found many are fans of mobile and wireless technology, with wireless LANs used extensively and also GPRS and 3G wide area connectivity.

Security is a concern, said Norton, especially when a denial of service attack - increasingly affecting SMEs and home workers who now have broadband always-on connections - can bring down an office for days.

In general IT knowledge was perhaps higher among the sample than had been expected, for example with 64 per cent having heard of open source and 77 per cent of those claiming to understand its benefits.

One tech-savvy respondent, when asked what would be on his or her wishlist, replied: "Blade servers for the business service with mirrored sites, SAN [storage area networks], tablet PCs for off-site workers, 3G data comms."