With rumblings of the "R" word (RECESSION!)being bandied about on the business pages, it's hard to be optimistic about SMB IT spending in 2008.

Should those fears be realized, IT budgets across all segments could be cut as much as 10 percent, warn analysts such as Gartner. And Forrester Research says the enterprise IT market will likely remain healthy, while the SMB IT market "looks shaky."

But the news is not all doom and gloom. SMBs will spend on IT this year, analysts report. SMBs' feelings of insecurity about business conditions actually mean they'll boost their investments in, well, solutions that make them feel more secure.

They'll shell out for solutions that protect and reap more benefit from their existing investments in people and technology.

"Historically, SMBs tended to replace technology reactively when something went wrong," says John Venator, president and CEO of CompTIA. "Now, they are proactively looking for solutions that enable them to leverage their networks and boost productivity and efficiency."

Predictions and ResultsThe following is a round-up of some predictions and survey results for 2008:

CompTIA surveyed 724 businesses with fewer than 1,000 employees and found 29 percent said they intend to invest in secured data backup, storage and disaster recovery; 24 percent will invest in IP telephony; 19 percent in server virtualization and consolidation; 18 percent in Wi-Fi and 13 percent in storage area networks in 2008.

In June, Astaro, which simplifies Internet security for SMBs, surveyed 2,800 channel partners, resellers and end users. It found that planned investments for the next fiscal year show that nearly 70 percent will increase budgets to prevent unauthorized access to networks and data. One quarter of respondents will spend 7 to 10 percent of their total IT budget on security, and 13 percent plan to spend more than 15 percent. Sixty percent expressed concern in vulnerability assessment, leakage of confidential data and protecting Web applications from worms or hacker attacks (via SQL/command injection); of this percentage, partners also plan to invest in protection against these threats. Half reported desktop security for notebooks and wireless data communications as priority areas.

In a separate survey of 1,070 organizations, CompTIA found nearly one-half indicate they intend to increase spending on security-related technologies, and another one-third expect to increase spending on security training.

The Tier 3 SMB ERP market will increase at a compounded annual growth rate of more than 11 percent to reach $8.9 billion by 2011, according to a new ARC Advisory Group study.

A Nemertes 2007 benchmark study, "Building a Successful Virtual Workplace," found that SMB budgets will rise at a rate of only 2 percent per year, versus 4 percent for larger enterprises. Nevertheless, SMBs have an ever-growing list of application and service needs. In addition, SMB purchases are increasingly driven by solution quality and features rather than cost. All these trends add up to growing SMB interest in integrated systems to reduce the number of managed platforms while also providing an expanded set of applications.

SMB 2.0
Analysts are beginning to recognize that the SMB market is not one vast, amorphous lump, and are starting to bettersegment SMB buyers. Global market intelligence firm IDC notes the existence of a group of small and mid-size companies, dubbed "SMB 2.0" firms, as critical prospects for technology companies. This group accounts for 17 percent of all SMBs regarding company counts, but nearly 30 percent of all SMB IT spending, according to IDC. When combined with a similar group, the "SMB 1.5 Fast Followers," the two groups represent more than 60 percent of all SMB IT spending.

These firms will continue to be successful, and that success will translate into above-average increases in IT spending per company. According to the IDC report, "The products and services these clusters will seek in the next six to 12 months are precisely those that other SMB clusters (especially the 'Skeptics' and 'Middle of the Roaders') will be looking for in the next two to three years."

Tips For Success

1. SMB IT budget increases may be flat to slightly higher in 2008.
2. Security and productivity will dominate SMB spending.
3. SMBs are starting to buy proactively based on quality and features over cost.
4. Be wary of "greenwashing" designed to make less ecofriendly products appear more beneficial than they really are when all factors are considered.

VSR