Small, Midsized Firms To Spend $280 Billion On Technology By 2012 - InformationWeek

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IT Leadership // IT Strategy
12:24 PM

Small, Midsized Firms To Spend $280 Billion On Technology By 2012

Businesses with five to 99 employees will represent 32% of information and communications technology spending this year alone, according to a Compass Intelligence report.

Information and communications technology spending will increase among small and midsized businesses, but it will be affected by the current economic crunch, according to research from Compass Intelligence.

"America is facing very serious economic conditions, which will not change overnight," said Kneko Burney, president and CEO of Compass Intelligence, in a prepared statement. "This means that businesses large and small will need to become more efficient and innovate if they are to survive the current crunch."

A new five-part series of reports called, "Economy 2.0: New Challenges & Opportunities in Business ICT Spending," predicts that small and midsized firms will increase their ICT spending by 6% to 8% annually through 2012. Those firms could present communication technology vendors with the most opportunity for revenue growth since they are expected to increase ICT spending the fastest.

This year, U.S. businesses are forecast to spend $688 billion on ICT services, equipment, outsourcing, and personnel, according to the report. Managed and hosted services, wireless, and some networking will grow the fastest between 2008 and 2012, according to Compass Intelligence's research.

Businesses with five to 99 employees will represent 32% of ICT spending this year. By 2012, they will spend nearly $280 billion, according to the report.

Companies with 100 to 999 employees account for little ICT spending in the U.S. business market, but the report predicts they will increase spending the fastest through 2012, when they will likely spend more than $133 billion.

"Leveraging new technologies, particularly Web 2.0, where business customers leverage the Internet in new and creative ways to connect with their partners and customers, will drive business IT spending for the next couple years, with the greatest impacts being felt in the small business market," Burney said. "Beyond 2009, I expect to see the emergence of 'Web 3.0' for commercial businesses, where firms will use a combination of social networking, content and contact management, and e-commerce to generate new revenue, while improving the overall customer experience."

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