Small businesses to spend US$1.45tn on technology this year

More than 140 million SMBs worldwide are expected to spend US$1.45 trillion on technology in 2023, with cybersecurity spending to increase to US$77 billion

Small and medium-sized businesses will increase technology spending this year 2023 and remain upbeat despite the economic challenges, new research claims.

Specialist technology consulting and research firm Analysys Mason predicts that 145 million SMBs worldwide are expected to spend US$1.45 trillion on IT in 2023 (40 per cent from the Americas, 30 per cent from Europe, the Middle East and Africa and 30 per cent from Asia–Pacific), driven by the post-pandemic trend towards digital transformation. 

This represents a growth of 6.3 per cent over 2022 spending, down from the seven per cent year-on-year growth expected before the pandemic. The predictions are based on the data in Analysys Mason's SMB Technology Forecaster, which provides insights into SMB spending in 132 technology categories in 52 countries.

Analysys Mason predicts a shakeup in how vendors and the reseller channel sell to SMBs. One in three SMBs plan to switch channel providers to gain enterprise levels of service and support, and SMB behaviour has shifted significantly, resulting in more demand for cloud-based and as-a-service solutions.

"SMB technology spending is gradually getting back to pre-pandemic levels," says Bob Takacs, Research Director, Analysys Mason. "There is concern about the broader economic environment, but SMBs are confident in their own businesses given that they pulled through the pandemic and are focused on how they can be set up for growth."

The message to technology vendors and resellers is to focus on service and support while delivering clear messages around the business use cases of technology solutions, says Takacs. 

Analysys Mason’s 2023 predictions for ecosystem transformations include:

  • 37 per cent of SMBs plan to switch channel partners in favour of an 'enterprise-lite' experience of support and services.
  • SMBs' IT spending through MSPs is expected to grow by 11  per cent year-on-year from US$279 billion in 2022 to US$311 billion in 2023, driven by the need for end-to-end support in managing increasingly complex software stacks and driving forward digital initiatives.
  • SMBs will spend more than US$66 billion on IT solutions from telecom operators. Eighty per cent of SMBs would consider taking IT services from operators.

And with regards to new spending priorities, the company predicts: 

  • As-a-service spending will increase. SMBs' spending on platforms-as-a-service (PaaS) solutions is expected to grow by 18  per cent year-on-year from US$3.4 billion in 2022 to US$4.0 billion in 2023. Software-as-a-service (SaaS) spending is expected to grow from US$44 billion in 2022 to US$54 billion by 2023, representing a 22  per cent year-on-year growth. PC and device-as-a-service (PCDaaS) models will shift focus from device procurement to a fully integrated IT experience
  • Rising energy costs will affect SMBs' IT spending decisions. This will lead to an increase in the use of IoT-related solutions, such as energy usage apps and smart meters, in addition to finance and expense management applications.
  • 24 per cent of SMBs worldwide plan to start environmental, social and governance (ESG) initiatives, and 46 per cent are more likely to buy from vendors with established ESG policies.
  • Spending on cybersecurity solutions will increase from US$69 billion in 2022 to US$77 billion in 2023.
Share

Featured Articles

KPMG UK announces major alliance expansion with Google Cloud

The investment underpins the ongoing alliance to help UK clients digitally transform their business through Google Cloud’s leading technology

Kyndryl driving Stellantis’ IT infrastructure transformation

Stellantis is adopting Kyndryl Bridge to enable improved management of IT infrastructure and real-time insights across its technology environment

The cutting edge: Edge computing trends to watch in 2023

As the IoT has grown and the volume of data has increased, edge computing has become increasingly important. We look at the edge trends to watch this year

Shadow APIs pose serious threat to fintechs, report finds

Cloud & Cybersecurity

IBM and NASA to research impact of climate change with AI

AI & Machine Learning

'Change is the new normal' Accenture cloud study finds

Cloud & Cybersecurity