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New projections for IT spend in the SMB for 2021, and the why

Some additional market data from TechAisle.   Quoting liberally from the linked research.

US SMB IT spend is forecast to grow by 7.6% in 2021 over 2020. 

Data shows that 45% of US SMBs will be in the high growth segment, with IT budget increases ranging between 7.5% to 15%.

However, 12% of SMBs will experience budget decreases of more than 5%.

The majority of the declining IT growth segment will be in the 1-49 employee sizes.   But, small businesses will grow their IT spend?

How to reconcile the data?    It’s how technology is acquired. 

Nearly two-thirds of micro-businesses prefer acquisitions structured around leases, whereas one-fourth of midmarket firms plan to move to “as-a-service” approaches. 

IT services spending will grow by 8.6%, driven by managed services, data/platform integration, cloud orchestration, and business process automation.

2021 will be the year of the midmarket segment, with IT spending forecast to grow by 8%.

Why do we care?

The big takeaway for me is that difference in acquisition.    The smaller you are, the more you’re using SaaS and “leases”.    It’s a bit obvious when you think about it, but that doesn’t mean it’s less relevant.    

Most providers, who have built their business on a core bronze /silver /gold/ paper/ leather/ vibranium package tier may have baked in too much dependency on devices and endpoints and not enough on the management around these SaaS apps.    

Monthly recurring revenue IS the base for a solid business, but it’s not the ONLY piece.  The best in class providers have a mix.    I know I’ve over rotated on this in the past myself.     In this future state, providers focused on smaller customers are far more system integrators and consultants than they are infrastructure managers.  Is your skill set ready for that?   Is your staff makeup?  What’s the plan to get there?    That’s why we care.

Source: TechAisle