I spotted an interview in ZDNet with Laurie McCabe, co-founder and partner at tech analyst SMB Group, who offers that SMB spending on IT might be in line with their enterprise counterparts, and one of the main reasons for this is the cloud. Let’s pull from the piece.
The reason is simple: many small businesses, especially younger ones, are not so encumbered by a reliance on the legacy applications that can proliferate in older, bigger firms.
With effectively a greenfield site on which to build, SMB owners and managers are searching the market for the best cloud-based solutions to the challenges they face, whether that’s managing payments, automating time-consuming activities or supporting workplace collaboration.
If you’re a newer business, you’re not probably going to buy a lot of software that you have to run on-premises,” says McCabe.
“That means you’re going to start right out the gate thinking about what’s the easiest way for you to get the solutions your business needs – and in most cases, that’s going to be through the cloud.”
Cloud spending by SMBs has shot up significantly during the past year, according to one report which predicts that 63% of SMB workloads and 62% of SMB data will reside in a public cloud within the next year.
AND
In fact, the tech analyst says SMBs continue to be optimistic about their companies, even though they face ongoing impediments, such as tough macroeconomic conditions and geopolitical instability.
It predicts global IT spending by SMBs will increase by 5.8% year-on-year in 2022; this growth will reach 7.4% by 2025.
More specifically, much of this tech spend will be directed to the cloud. The tech analyst expects global SMB spending on SaaS-based business applications and collaboration tools will grow 17% annually through 2026 to reach $291 billion.
Why do we care?
This analyst sounds a lot like me in my If I was starting an MSP today piece. The emphasis on SaaS specifically is why we care – I continue to believe there is a disconnect going on between those traditional infrastructure companies who focus on infrastructure as a service, meaning Azure, GCP, and AWS) versus SaaS broadly. There’s lots of coverage of Microsoft 365 and a lot less beyond that in the SaaS space.
And that’s where all the action, money, and value are.