Budget won't boost IT spending

Small business infrastructure investment depressed between now and 2014.

A report published by research firm IDC yesterday [24/03/10] revises its previous IT spending forecast for small to medium sized businesses (SMBs) downwards.

It estimates that SMB investment in new hardware and software worldwide will not return to 2008 levels until 2011, and will increase by just 5.5 per cent between 2010 and 2014.

Chancellor Alistair Darling included a number of fiscal measures designed to loosen SMB purse strings in yesterdays’ budget, including a £2.5bn package to boost skills and innovation, a one year business property rate cut, and a doubling of the investment allowance for small firms to £100,000.

IDC expects spending on PCs and peripherals to represent the majority of limited SMB spending, closely followed by software licensing, with servers and storage attracting a minority investment.

SMBs are estimated to make up 99.7 per cent of all businesses worldwide, and inhabit the low spending but high volume sector of the IT market so crucial to the fortunes of hardware and software companies.

But the recession has seen them cut their spending more than larger companies due to decreased revenues, restricted cash flows and cancelled orders.

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