Worldwide SMB IT spending to reach $676 Bn in 2021: IDC

The total IT spending by small and medium-size businesses (SMBs) will exceed $676 billion in 2021 according to IDC report.

"SMB IT spending growth continues to track about two percentage points higher than GDP growth across regions. But beneath that slowly rising tide are faster moving currents that reflect the changing ways SMBs are acquiring and deploying technology," said Ray Boggs, Vice President, SMB Research, IDC.

Boggs noted that while SMBs, especially smaller ones, have immediate tactical needs to sharpen performance, they are also looking to coordinate resources in a meaningful way. For many this will be an important step towards Digital Transformation (DX).

SMBs will spread their IT investments about equally across the three major categories – hardware, software, and IT services – with these categories accounting for more than 85% of total SMB technology spending worldwide.

While hardware purchases currently represent the largest share of this spending, IDC expects 2019 to be the watershed year when software and IT services spending both surpass hardware spending. The smallest of the major categories – business services – will see the greatest spending growth of the four technology categories at 7.1% CAGR, followed closely by software (6.9% CAGR).

One third of all SMB software purchases in 2017 will be from the top 3 applications categories: enterprise resource management (ERM), customer relationship management (CRM), and content applications.

Application development & deployment and system infrastructure software will also be key areas for SMB software investment. Hardware spending will be led by purchases of PCs and peripherals, which accounted for almost half of SMB hardware spending in 2016 (49.6%) a share that will decline throughout the forecast period to 43.3%.

SMB services spending is divided between IT services and business services. While SMB spending on IT services will continue to be more than twice that of business services throughout the forecast period, business services' share is growing, with spending growth roughly twice that of IT services (7.1% vs. 3.7% CAGR).

On a geographic basis, the United States represents the largest market with SMB IT spending expected to total $171.3 billion in 2017. North America in total will account for about one third of worldwide SMB IT spending throughout the forecast period. Western Europe and Asia/Pacific (excluding Japan) are the second and third largest regions for SMB IT spending, with Asia/Pacific growing faster than the overall market.

Tags: Worldwide SMB IT spending, IDC, idc report, Digital Transformation, CAGR