The seasonality of IT services and the priorities of those SMBs

Microsoft, with their Landscape and Attitudes study, is a look at 3,000 small and mid-sized businesses (SMBs) in 10 countries around the world.  

Microsoft defines SMBs as organizations with one to 300 employees, which covers about 149 million customers. The sector has been growing 20% year-over-year (YOY), and 80% of that SMB business is transacted through partners.

Microsoft estimates that in 2023, IT spending will grow to about $1.2 trillion for organizations between one and 300 employees. Much of that will still be for on-premises solutions, but over $500 billion will be cloud-related spending.

Highlights:

• Half of the tech decision-makers are senior and are mainly GenX
• A significant number (41%) of millennials are moving into decision-making roles
• 80% of men are tech decision-makers compared to 20% of women
• Millennials are much more optimistic about the future and more confident (40% more) that their company will achieve business objectives

The smaller the organization, the more likely it is to be focused on survival. It is also less likely to have a business plan and be less optimistic about the future. However, most SMBs (69%) prioritize growth, regardless of size, and second place is profit, at 67%.  

I also want to note an analysis by Tortoise & Hare software of Google Trends data related to IT services.    Quoting the blog.

There’s been much panic recently about an upcoming recession, and current trend data points to a drop in demand for IT services. (July 2022) If we look at the historical data for the select queries above and aggregate them, we can see that a drop in IT services demand during the summer is nothing unusual. In fact, if you analyze historical query data for IT services related volume you see a pretty clear correlation between when the kids are out of school and when people are shopping for IT support services. There are seasonal slumps almost every year between late May and late August, when summer vacation is in session and families are more likely to be out vacationing. There are also seasonal slumps over the holidays when people are traveling and kids are out of school for Christmas break.

Don’t let it be said that I’m not about contrasting opinions.      I’ve mentioned that economic conditions are weird but also have patterns.    The seasonality of services is real, and we have every reason to believe it will continue.  You might be a bit slower simply due to it being summer.

Now, the other data point I noted and wanted to highlight was the rise of GenX.  I’m biased – I am Gen X – but it’s a generation rarely mentioned in all of these discussions.   We’re used to it – it seems to be a theme for the generation itself.   What this DOES mean is that the power is fading from the Boomers.     Next time you look around and see a room full of white-haired boomers, you should consider… are you in the right room for where the decision makers are?