How Are SMBs Spending Their IT Budgets in 2019?
Each year, IT continues taking a larger piece of the operational pie. According to the
2019 State of IT annual report from Spiceworks, IT budgets for all types of businesses have shown consistent annual growth, and that trend will continue in 2019. However, it’s significant to note that while everyone from small businesses to large enterprises have, overall, increased their annual IT budgets, spending by industry and by size make a significant difference in how that money is allocated.
While large enterprises are targeting cloud budgets for growth, SMBs are primarily focused on hardware spending. One of the biggest drivers of increasing IT budgets overall is the need to upgrade outdated infrastructures and replace aging hardware, which is crucial for both security and scalability.
Many companies may also feel a deadline looming, since the end of support for Windows 7 and Windows 2008 are rapidly approaching. Upgrading IT now can help avoid disasters down the road.
Not only have budgets grown larger across the board, but attitudes about it have changed, particularly when it comes to the small business sector. Business decision makers at SMBs now view IT funding as crucial as other departmental funding. Here’s a look at how SMBs expect to spend their IT budgets in 2019.
Overall, SMBs increased their IT hardware budget from 31% of their allocation in 2018 to 42% in 2019.
In most cases, the biggest portion of this year’s hardware budgets will go toward desktops and servers. While larger companies tend to use laptops as their primary computers, Spiceworks reports that only
25% of small companies depend on laptops for their main computing source.
Desktops are the primary computing device for 68% of small businesses, and just 1% of smaller organizations depend mainly on tablets. Expect to see smaller businesses focus their spending on desktops and laptops, while medium-size businesses will begin investing more in tablets and mobile devices. Larger enterprises are expected to spend more of their hardware budgets on security gear.
Businesses will also allocate more funding towards servers to ensure compatibility with VMware. For example, the companies that want to run the HCL for vSphere 6.7 will need servers that are newer than Dell’s 12th generation and HP’s 8th generation, so they may need to invest some of their hardware budget in a server upgrade to achieve compliance.
When it comes to software purchases, the
investments for small businesses are fairly evenly spread across four areas:
- 12% - Operating systems
- 0% - Virtualization
- 10% - Productivity
- 10% - Security software
The widening number of options in operating systems means that today’s SMB can find an OS that is perfect for their exact needs.
Other IT options that once were only available to large corporations and enterprises now have become accessible to businesses of all sizes. One area where that’s particularly noticeable is in virtualization. Through virtualization, businesses can streamline their IT and provide employees with access to resources from any device, regardless of where they are. As it becomes more affordable, it will continue to play an important role in business operations of all sizes.
The cloud has created an environment where small businesses can do more with fewer resources. In 2019, the most money allocated toward the cloud will go to online backup and recovery, with about 15% of cloud budgets being focused here.
An estimated 11% of budgets from businesses of all sizes will go toward email hosting, but small businesses will put even more into this service. Smaller organizations expect to spend about 19% of their cloud budget on email hosting, up significantly from 11% just one year ago. That spend will include programs like
Office 365, which has become one of the most flexible options available and has a number of different choices for mail delivery, depending on the type of mailbox. This makes it customizable for small businesses.
Online productivity and web hosting both are important to SMBs for 2019 as well; each category will receive about 9% of small businesses’ cloud budget.
SMBs are going to spend more money migrating to the hybrid cloud, which combines the use of a private on-premise cloud and a third-party public cloud that allows for the sharing of data and applications. Properly managed, this provides companies with greater flexibility and more security.
The fourth and final key area of IT spending for businesses in the coming year will be in the area of managed services.
Managed hosting tops the spending plan in that category, with 14% of small business managed services budgets going in that bucket. By outsourcing storage needs to a
managed services provider, businesses can save both the time and costs associated with server management. Rather than owning a server, managed hosting allows businesses to rent the hardware and pay a hosting fee to have all maintenance done.
Managed storage/backup and security also are high on the list, grabbing 10% and 8% of managed services budgets for SMBs.
Managed storage is increasingly important for small businesses, since it adapts to the changing storage needs of a business. Since a business may need more storage from time to time, a managed storage solution allows them to get additional storage without having to invest in buying storage services and paying for administrative services during peak times. And, when they no longer need that amount of storage, it’s simpler for them to adjust back.
Data backup and security are both critical to managed services, which means that companies using managed services can have greater confidence in the safety of their sensitive information. Data losses are extremely costly to any business, but can be particularly devastating to a small business. Knowing that
downtime costs a small business, on average, $8,000 an hour, drives home the need to have data securely backed up.
As 2019 approaches, business decision makers are looking at how to stay current on the latest technology and remain competitive in their market. As they continue investing heavily in IT, small businesses will level the playing field while upping their game.
Aventis Systems can help you find the right hardware and software solutions for 2019 and beyond. As you look at cloud solutions, we can answer your questions and help you choose the cloud service provider for your business’s needs. Contact us today at 1-855-AVENTIS to learn more, or visit us