SMBs represent about half of all tech spending in the US, research suggests, in some cases outspending large enterprises. This makes SMBs an incredibly important segment for tech marketers. So how are SMBs faring with regards to their tech purchase plans? Verizon’s annual State of Small Business Report [pdf] offers some clues.
Around half of the SMBs surveyed expect the US economy to get either much worse (14%) or somewhat worse (35%) in the coming months, outweighing the 26% who expect it to get better to some degree. There’s more optimism regarding the local economy where SMB respondents are based, with 32% expecting it to worsen against 23% expecting improvement.
Despite generally believing that the economy will get worse in the next few months, SMBs aren’t too concerned about their financial security: 19% believe it will get worse, while almost double the share (37%) expect that it will improve.
That may be why tech plans haven’t been too affected by the economy. When asked whether their business has already done or has plans to undertake a variety of measures due to the potential for an economic downturn in the near future, 16% share said they have already cut back on planned technology investments or are in the midst of doing so, while an additional 10% share reported that they are planning to do so in the next 6 months.
In sum, about one-quarter (26% share) already have or are planning to in the next 6 months cut back on tech spending, down from 29% who said the same last year. Moreover, about twice as many (50%) said they have no current plans to cut back on tech investments.
Looking at services or technologies that SMBs have added or upgraded over the past year, the analysis finds that internet connections have been the most widespread. Some 53% have added or upgraded their internet connection with strong bandwidth that allows for high-capacity activities, while 51% have added or upgraded their high-speed internet plan.
Other services or technologies that SMBs have added or upgraded over the past year include:
- Online business search assistance services (42%)
- Communications and networking hardware (41%)
- IT or technical support services (40%)
- Video and web conferencing tools (40%)
- Website hosting or development services (38%).
The leading reasons why SMBs have added or upgraded technologies in the past year are to make their operations more efficient, to better connect with existing customers, to help with new customer acquisition, and to meet demands created by new ways of working (e.g., hybrid, remote).
And while many SMBs are suffering from “app sprawl,” those who upgraded part of their stack in the past year have been happy with the results. Some 71% said that it addressed their business challenges, 66% reported that the upgrade led to cost savings, and 52% said that it resulted in incremental revenue.
For more, check out the full survey results here [pdf].
About the Data: The results are based on an August survey of 681 small to midsize business owners and decision-makers.