Next year, small and medium-sized businesses are projected to increase their IT spending by 6.2% and 6.7%, respectively, to roughly $1.58 trillion, according to the latest Small and Midsized IT spending forecast from UK-based TMT consulting firm Analysys Mason. This marks an upward trend in tech investments, which are expected to increase 8% year over year by 2027, reaching $1.98 trillion.
With inflation and pandemic fears decreasing, the firm believes SMBs are ready to invest in business growth.
The report identifies managed services and cybersecurity as key spending areas, along with migrating infrastructure and business application workloads to the cloud.
By 2024, around two-thirds of all SMB expenditures on business applications will be allocated to SaaS offerings as businesses transition to cloud-based solutions. Analysys Mason expects artificial intelligence to become a major driver of growth in SaaS spending as AI-enabled tools gain popularity.
SMB spending is expected to increase across all categories. Business applications are expected to see the largest spending increase: 11% in 2024 and 13% in 2025. Infrastructure spending is predicted to rise 8.6% in 2024 and 10.5% in 2025, while cybersecurity outlays will likely rise 7.4% and 7.1% respectively, over the next two years.
The study anticipates the revenue opportunity for MSPs and systems integrators to increase by a CAGR (compound annual growth rate) of 13% from 2023 to 2027, reaching a combined $504 billion in 2027. The research firm anticipates a CAGR of 9% in direct vendor purchases as well.
Although traditional resellers and VARs are anticipated to retain a substantial 42% share of the SMB IT spending market, researchers anticipate a decline in the forecast period. SMBs are expected to increasingly turn to MSPs and solutions integrators for consultative assistance in addressing their evolving technology needs and achieving cost savings.
Image: iStock
