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60% of A/NZ SMBs are in survival mode

January 20, 2021

IDC Australia/New Zealand’s survey finds 60% of SMBs are in survival mode due to the pandemic, but expect to increase IT spending in 2021.

In Q4 2020, IDC surveyed 1210 small and medium businesses (businesses with less than 500 employees) across Australia and New Zealand to understand their priorities, challenges, and planned technology investments in 2021. The survey found that 60% of A/NZ SMBs are in a crisis or survival mode due to the pandemic.

“The impacts of the lockdowns and work-at-home directives have not only delayed projects or initiatives, but also exposed SMBs shortcomings in connectivity, support, security, and sourcing. Business resiliency of these SMBs was put to the test as their IT systems adapted to a new operating environment.” said Chris Morris, Vice President, Cloud Services and Partner at IDC Asia Pacific.

While cost optimisation remains a top priority, IDC said it expects SMBs to continue investing in technology to modernise their existing systems and to build innovative new business models. Slightly more than half (51%) of the Australian SMBs indicate higher IT spending in 2021; New Zealand SMBs are not as optimistic (43% only). IDC anticipates spending in cloud, collaboration, cybersecurity solutions to increase the most in the coming year.

Increased investment in cloud-based solutions brings opportunities for vendors serving the SMB market. The need for access to support during both implementation and ongoing management will persist as solutions evolve and increase in complexity. Implementation and integration of the cloud solutions will provide the largest opportunities for vendors as SMBs grapple with requirements for industry compliance, security and resiliency.

“COVID-19 has challenged SMBs’ digital transformation journey beyond their capabilities. With digitalisation being the focus for A/NZ SMBs in the next 24 months, these businesses will require tech and business professional services as much as technology itself,” said Morris “SMBs are often challenged on their levels of technology and business digital skills and increasingly reliant on their technology suppliers. Suppliers are advantaged if they can deliver what is needed. Success with the SMBs will be contingent on an understanding of their businesses and consistent trusted relationships.”

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