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Small Business IT Spending Likely to Grow in 2005

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April 22, 2005--Small businesses are likely to ramp up their IT spending in 2005, according to a recent survey of 50,000 small businesses conducted by SBTV.com.

In its poll, nearly 77% of the business owners surveyed said that they would invest in new technology in 2005. This is surprising since other surveys of small business have shown flat growth in IT spending this year.

JupiterResearch discovered that small business technology spending would be relatively flat in 2005 in its survey of 260 decision makers at companies with fewer than 250 employees. Forty-four percent of the businesses surveyed said they were budgeting less than $5,000 for technology purchases this year.

However, in its survey, JupiterResearch did discover a population of small businesses ramping up tech spending. Newer businesses, those less than three years old, noted they would increase IT spending anywhere from $5,000 to $25,000 in 2005.

Exactly what these newer small businesses will be spending their budgets on is not yet clear. "We don't really know why the newer businesses will invest more. Small businesses market is so diverse that it is tougher to draw broader and deeper conclusions compared to larger businesses," said Joe Wilcox, an analyst with JupiterResearch.

The optimism among small business owners is in contrast with the cautious spending approach that mid-size and large enterprises are exhibiting. A Gartner survey of 416 large corporations revealed that a mere 5% of respondents planned to boost their IT operating budgets in 2005.

"In many ways, technology and the Internet have leveled the playing field for small businesses when it comes to competing with each other, and larger organizations," said Susan Wilson Solovic, CEO of SBTV.com. Increasing tech spending seems to be just one way smaller companies compete in a challenging economy.

Last updated: Apr 22, 2005




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