This surge in modernization is being fed, in part, by the increasing affordability of today’s computer hardware, mobile devices and cloud-based services. A survey that was conducted by Brother International Corporation finds that there’s been an 18% uptick in small business technology spending since 2010.
Figure 1: North American Spending by SMBs ($ billions), 2011–2017
According to Figure 1, courtesy of Deloitte University Press, Gartner reported a Compound Annual Growth Rate (CAGR) of 4.8% in North American IT spending amongst Small to Medium Sized Businesses (SMBs) from 2011-2017. Spending started at $534 billion per year, and has grown to $686 billion per year. Spending categories in the report included Hardware, Software, and IT services. IT services accounted for the most spending and saw the most growth; software also saw steady growth and was the next top priority in spending; and hardware spending almost stayed static, increasing and decreasing Year Over Year (YOY) at a steady rate.
The primary reason why more business owners are opening their wallets is simple: Less stress over spending and a healthier economic outlook. Of the 500 SMBs with 100 or fewer employees that were surveyed, more than half were no longer stressed out over the economy. This has, in turn, led to increased spending overall, helping to feed a multibillion dollar office technology industry that continues to grow.
“Our survey shows that a majority of small businesses see a light at the end of the tunnel and are willing to invest in technology solutions to increase productivity and capitalize on new technology trends,” said John Wandishin, Vice President of Marketing for Brother.
Among business owners surveyed, 62% said they were already using cloud-based services because they were easier to access, more secure and reliable. Additionally, 41% have plans to increase technology spending, with a specific concentration on the Internet of Things (IoT) and mobile payment systems.
Things are looking up for the small business as you can deduce from technology in business statistics. As technology continues to advance and become more affordable, coupled with an increasingly healthy domestic economy, predictions are as healthy as they have ever been. Let’s take a quick look at the most recent small business technology statistics, so you can get a clearer picture of what the future looks like in this sector.
According to a study done by Clutch shown in Figure 2, of the 279 small businesses that asked how their company’s spending on IT service providers will change in 2016 compared to 2015, 48% expected it to remain flat. About 30% expected it to increase by 11–30%. Between 1–6% expected it to either increase by 31% more, or decrease by 11% or more. With small businesses becoming more dependent on the latest technology for productivity and efficiency and more aware on how many businesses use technology, it’s no surprise most expect to either continue using their IT service provider, or increase their hours.
While there are plenty of small business technology needs, those needs are not devoid of any caveats. Today’s small business owner has plenty to worry about. According to CIO, the most common technology concern is: IT disruption.
Insight’s recent report, Ever-Evolving Tech and Your Growing Business, revealed some discerning statistics on small business technology worries that many small business owners have. According to the study, 55% of small business owners feel that their current technology solutions are actually “a hindrance to incorporating or adopting new technologies.” Meanwhile, a majority of 65% of small business owners feel that IT disruption will play a strong factor in their tech spending decisions. This coincides with other findings by the study that conclude that 75% of tech influencers at medium-sized businesses are also concerned about IT disruption.
According to Wikipedia, “IT disruption falls” under the same category as “disruptive innovation.” It’s defined as: “A disruptive innovation is an innovation that creates a new market and value network and eventually disrupts an existing market and value network, displacing established market leading firms, products and alliances. The term was defined and phenomenon analyzed by Clayton M. Christensen beginning in 1995.”
Another good example of this would be the Tech Target definition: “A disruptive technology is one that displaces an established technology and shakes up the industry or a ground-breaking product that creates a completely new industry.”
The best and most recent real-life example of disruptive technology would be smartphones. When they arrived, they disrupted a multibillion dollar cellphone and Personal Digital Assistant (PDA) industry, while also introducing technologies like Bluetooth and Mp3 to the mainstream market.
But with newer cloud-based solutions in place, such as Everything as a Service (XaaS), disruptive technology will only affect the small business owner minutely. For instance, Chrome Books have minimal technology under the hood and are really a cloud-tethered device. Without the cloud-based services these newer and economic laptops connect to, they are essentially useless. Disruptive technology does not really affect them because they are connected to the cloud, which is constantly evolving.
Forward-looking small business owners can get on the path to modernization with a smart plan in place. Along the way, it’s wise to partner with a trusted provider that can assess your technology needs and help your business adopt to the best technologies for today and tomorrow.
Looking for small business technology solutions? Insight uses its 20 years of experience and partnerships with the leading providers to bring you modern solutions with streamlined adoption. Find out how our specialists can help by calling: 1.800.INSIGHT.