February 13, 2018
In a new update to IDC’s Worldwide Semiannual Small and Medium Business Spending Guide, total SMB IT spending is predicted to grow by 4.9 percent in 2018.
According to IDC, worldwide SMB IT spending will reach almost $602 billion (€487.6 billion), driven by mid-market demand for software and services. In addition, with “a compound annual growth rate (CAGR) of 4.7 percent for the 2016-2021 forecast period, spending by businesses with fewer than 1,000 employees on IT hardware, software and services, including business services, is expected to reach $684 billion (€554 billion) in 2021.”
This increase is mostly accounted for by demand from mid-market firms, which “will account for the largest share of total SMB IT spending even though they are farther along in technology deployment than small businesses.” IDC reveals that more than two thirds of global SMB IT spending will come from companies with between 100 and 999 employees through 2021.
Both medium-sized and large businesses will witness a similar CAGR of 4.8 and 4.6 percent respectively, with small businesses fitting in between at 4.7 percent over the five-year forecast period.
IDC explains that hardware, software and IT services “will each account for around 30 percent of total SMB spending in 2018 with business services delivering the remainder.” Though hardware currently receives the most spending, IDC “expects it to be overtaken by software in 2019 and IT services in 2021.”
“SMBs around the world are increasingly interested in investing in resources to improve employee productivity and improve their competitive positions,” said Ray Boggs, vice president, SMB Research at IDC. “While SMBs, especially smaller ones, have immediate tactical needs to sharpen performance, they are also looking to coordinate resources in a meaningful way. For many this will be an important step in their Digital Transformation (DX).”
Geographically speaking, IDC reveals that the USA “will be the largest market with SMB IT spending expected to total $186 billion (€150.6 billion) in 2018. China will be the second largest country with $56 billion (€45.3 billion) in SMB IT spending forecast for this year, followed by Germany ($37 billion/€29.9 billion), the UK ($36 billion/€29.1 billion), and Japan ($35 billion/€28.3 billion). The countries that will see the fastest IT spending growth by SMBs will be Peru (11.7 percent CAGR), Chile (11.6 percent CAGR), and Indonesia (11.2 percent). China and India will also be among the fastest growing countries, each with a five-year CAGR of 7 percent.”
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