Small businesses faces tough tech-buying choices

SMEs are tech buyers too, and according to analysts, when they get their credit cards out, they're most likely to spend their cash on web hosting and consulting on networks and security.

According to analyst IDC, it's particularly those in the medium-sized bracket--between 100 and 999--that are eyeing up IT services with increasing interest. The analysts also found that while they have less money to spend than their corporate counterparts, the SME segment tends to have big plans for IT services and a budget set aside to pay for them.

The IDC report, Filling and Delivering IT Services to the SMB market, also predicts SMEs will become more of a spending force to be reckoned with, growing their share of the US IT services buying market from 22 per cent to 28 per cent within the next five years.

While consulting and web hosting are on the agenda now, IDC believes services that can improve infrastructure capabilities will come out as future must-haves.

Quandary?
However, according to Ray Boggs, VP from small/medium business research at IDC, the very nature of the SMEs themselves leaves them in a difficult buying position.

"[SMEs] especially those in the mid-market, with 100-999 employees, are in the awkward years of technology use: too big for the simple solutions that serve the smallest firms, but not yet ready for big ticket enterprise approaches," he said in a statement.

IT is increasingly becoming a staple of the small firm. Research from Dell and the Institute of Directors shows that many of even the smallest companies - with fewer than five staff - now have their own IT department.