What is the outlook for IT in SMBs?

6 minutes reading

A recent survey by Analysys Mason describes the current situation and future plans of small and medium businesses across four countries: Germany, Singapore, the UK and the US. The analysis focuses on the influence of the pandemic on the surveyed group of SMBs, the new and continuing challenges that the businesses face, and their prospects for the upcoming months. Why are businesses investing more money in IT? And how do they plan to make remote work safer and more productive? Find out what the trends are in the SMB segment and what you can learn from them.

1. The COVID-19 pandemic continues to impact SMBs

After a significant fall in 2020, revenues of surveyed businesses are gradually returning to their pre-pandemic level. Still, the majority of SMBs continue to face some pandemic-related challenges. Among the most prominent issues, Analysys Mason lists "worker shortages, supply chain delays and growing inflation." Lasting influences from these factors motivate SMBs to invest in IT solutions that can assist them with sales support, employee management, manufacturing and more.

Graph showing the revenue changes between 2020 and 2021 in USA, UK, Germany and Singapore


2. SMBs are focusing on expanding and hiring new employees

The surveyed SMBs exhibited an interest in future development in terms of expanding and hiring new staff. Of the two, the latter appears to be a higher priority, yet most SMBs noted that they faced difficulties when looking for qualified new employees. This issue is likely linked to the persistent problem of the IT workforce gap. It's becoming increasingly difficult for SMBs to attract IT talents, who often opt for jobs at larger corporations.

Graph showing SMB’s expansion plans for the next 12 months in USA, UK, Germany and Singapore


3. Both remote and hybrid work are here to stay

The pandemic has forced many employees to engage in a remote or hybrid work model. While the surveyed SMBs plan for some of their workers to return to the office, businesses in all of the discussed countries expect that approximately 40% of their workers will continue to work from home. Given the circumstances, surveyed SMBs view remote employee satisfaction as one of their primary business priorities.

Graph showing current proportion of employees working from home in USA, UK, Germany and Singapore


4. SMBs opted for IT measures that support remote workers

SMBs in all countries aim to prioritize the enhancement of their employees' productivity, engagement and communication. The measures taken to reach these objectives include purchases of new work equipment, regular well-being check-ins, and digital security improvements. The latter includes new security solutions and increased VPN capacity, as well as enforced security training.

Graph showing measures taken by SMBs to support remote employees in USA, UK, Germany and Singapore


5. SMBs' future technology priorities should benefit both remote and hybrid work

Since remote and hybrid work models are expected to remain common across the surveyed businesses, SMBs plan to focus on improving their productivity and connectivity. Some SMBs plan to continue replacing desktops with laptops and tablets, although isn't as urgent as it was in 2020. SMBs hope to increase their ability to deal with work-related issues remotely, which is why they plan to provide remote IT support to their employees. Moving businesses to the cloud is another common practice. About 22% of businesses plan to adopt cloud infrastructure, and approximately 19% of businesses want to employ cloud-based SaaS (software-as-a-service).

Graph showing SMB’s planned technology priorities in the next 12 months in USA, UK, Germany and Singapore

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6. Most of the surveyed SMBs use a managed IT service

Those SMBs who have yet to employ a managed IT service plan to invest in this area in the upcoming months. The greatest growth of these investments is expected in the US (51%), while the lowest is planned by SMBs in Singapore (39%). Businesses that currently operate without any managed IT service are most likely to search for managed storage, backup and recovery, managed security, mobile device management and managed PC services in the future.

Graph showing percentage of SMBs that are planning to increase their spend


7. Over 70% of surveyed SMBs plan to increase their investments in IT

As the findings above suggest, the pandemic motivated businesses to invest in their IT. Most of the SMBs plan to continue increasing their IT budgets; a decrease is expected only at approximately 2% of businesses across the four surveyed countries. According to the predictions made, the surveyed SMBs will invest approximately 4.93% of their revenue into IT.

Cybersecurity spending by SMBs should rise from $57 billion in 2020 to $90 billion in 2025. When it comes to spending by security solution category, managed security services are expected to have the biggest share, as they will account for 33% of SMB cybersecurity spending in 2025. 

Graph showing IT budget as a percentage of annual revenue for SMBs in USA, UK, Germany and Singapore

8. Most SMBs are optimistic about the future

Even in the uncertain times of the pandemic, most surveyed SMBs have expressed their belief in a successful business future. According to the Analysys Mason survey, medium-sized businesses in the US are the most optimistic, while the lowest level of confidence was demonstrated by small businesses in the UK, which also had to deal with the consequences of Brexit and rapid increase in energy costs.

Based on the Analysys Mason survey results, we see that most SMBs are planning to increase their cybersecurity spending. It comes as no surprise, as we can witness the rise of cybersecurity threats from year to year. But even with the increased budget, there are challenges to overcome, such as a shortage of qualified workers or the need to adapt technologies that allow for a hybrid work model. That model requires both securing remote infrastructure and building awareness among employees, who can be the weakest or strongest links when it comes to cybersecurity.