Small and medium-sized businesses (SMBs) with fewer than 1000 employees are a major driver of economies worldwide and form a critical segment for IT vendors and solution providers. Joseph Bertran, Senior Analyst at Analysys Mason, lists three key trends to follow this year for these growing businesses.
The Analysys Mason SMB Technology Forecaster reports that over 98% of all companies worldwide are small/mid-sizedOpens a new window . It is safe to estimate that they will spend USD1.4 billion on IT products and services in 2022. This spending is expected to grow at a compounded annual growth rate of 7% between 2021 and 2026. As described below, the top drivers of these companies’ spending can be grouped into the ‘three Ps’ (people, performance and protection). Â
1. People
SMBs will focus heavily on IT solutions that can help them manage remote working and employee satisfaction. Â
- Hybrid working will continue to drive spending in 2022 and beyond: The COVID-19 pandemic has resulted in a growing trend towards remote working. Some employees are now returning to their central office locations, but many are opting to work from home for at least some of the time. This long-term shift has prompted these businesses to invest more in IT solutions that facilitate working from anywhere. Key investment areas include infrastructure-as-a-service (IaaS), cyber security, collaboration and managed services.
- They will need to continue to invest in reliable collaboration tools to enable their employees to work from anywhere: Collaboration and unified communication have been stapled technologies in allowing working from home. SMBs have come to view collaboration as a ‘must-have’ solution, and they will increasingly rely on it to enable employees to stay connected and productive. The collaboration space has become highly competitive, and the top vendors are working to enhance their offerings using AI and augmented reality (AR) functionalities and improved audio/video quality.Â
- They will spend more on home office network management, which will become a crucial part of their IT infrastructure investments: Employees are increasingly working in multiple locations, so SMBs have started to reconsider how they manage their networks. Businesses are increasingly concerned with ensuring that employees can reliably and securely connect to the company network. As a result, there will be a strong demand for managed networking solutions that can support multiple sites and provide IT support for remote employees. They will also consider multi-site solutions that were previously tailored towards large businesses.Â
2. Performance
SMBs will increasingly explore advanced solutions while seeking advice from IT solution providers to optimize resources for better performance.
- AI-powered automation will boost spending on business applications: Many small businesses lack a solid understanding of how AI works and its implementation. However, they are rapidly aware that AI-enabled tools can simplify business processes through automation. AI-powered innovative solutions have become more affordable and more readily available, resulting in a growth in demand. They will be mainly focused on cyber security, CRM, marketing, HR, collaboration and accounting/finance solutions that eliminate manual processes and help to boost operational efficiencies.
- They will expect advice and guidance to be included in more of their product/service purchases: Small/mid-sized companies are undergoing digital transformation at a faster pace than ever before. Many are adopting complex cloud-based solutions to replace traditional on-premises counterparts, while newer firms are going straight to the cloud. Most of these businesses need help when it comes to running these cloud environments, whether they are migrating from on-premises solutions or are being ‘born in the cloud.’ They typically lack in-house IT expertise, so they are likely to turn to service providers or vendors for guidance and product support when purchasing and implementing cloud solutions.Â
- Imaging, video and AR will start to become mainstream business tools for SMBs: They are increasingly exploring the use of advanced solutions to improve their sales, marketing and operations functions. Businesses are keen to make their customers’ experience as frictionless as possible and are starting to adopt social commerce as a part of an omnichannel commerce strategy. They will increase their spending on tools that enable them to create engaging visual content to improve customer engagement. They will also invest in solutions that support AR functions in collaboration, 3D engineering and design. AR allows remote employees to increase their engagement during calls and helps users render realistic mock-ups for various products and designs.Â
- The use of PC/device-as-a-service (PC/DaaS) will grow and sustain the PC market: SMBs have gained a higher comfort level with the as-a-service model for hardware. As a result, they will increasingly opt for subscription-based models for their PCs and other devices. The as-a-service model provides the flexibility to add and remove devices as their needs change, which is particularly important as working arrangements continue to shift beyond the pandemic. The PC/DaaS model is an excellent fit for the evolving work environment and makes acquiring the latest devices more efficient and cost-effective. Â
3. ProtectionÂ
SMBs are more vulnerable to cyber attacks than ever before and will seek solutions that help them to protect their data.
- They will require business continuity and disaster recovery (BCDR) solutions to mitigate data security risks: The risk of data breaches and ransomware attacks is higher than ever for smaller organizations because of these threats’ increased frequency and sophistication. The hybrid working environment has exacerbated this further because employees’ devices no longer need to be in one central location. Employees may be logging into their company networks via unsecured routers and internet access points. As a result, the focus will be on ensuring that they can access their information in the event of getting locked out of their systems or experiencing a massive data loss.Â
- They will demand more managed security solutions from managed service providers (MSPs): Cybersecurity will continue to be a key priority for many small businesses in 2022. Most of these businesses are ill-equipped to implement and maintain sophisticated security solutions, so there will be an increased demand for security support. IT solution providers would need to help them set up and monitor their security systems, driving rapid spending growth on managed security. In particular, they will seek out managed security service providers (MSSPs) to support their specific security requirements.Â
The Road Ahead Â
SMBs are undergoing significant transformations to adopt solutions that will help them navigate potential disruptions in the future. They are looking for solutions that will allow them better to manage their people, performance, and protection. Their overarching goals will be focused on deploying IT solutions that will enable them to remain resilient and agile as they grow their organizations. With their growth trends, these smaller companies will start looking more like large enterprises with their IT profiles as sophisticated solutions become more mainstream.
What other trends do you predict we’ll see with the growth of SMBs over the next few years? Share with us on LinkedInOpens a new window , TwitterOpens a new window , or FacebookOpens a new window . We love hearing your ideas!