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IT Budgets Up, Hiring Down for SMBs

IT Budgets Up, Hiring Down for SMBs . / Credit: No jobs sign image via Shutterstock

The IT departments of small to midsize businesses are spending more but hiring less, a new survey shows. While the stuttering economic recovery has caused companies to put the brakes on adding employees, the rise of tablet devices and cloud services has spurred IT leaders to bump up their budgets to purchase and support new technologies and meet the growing bring-your-own-device movement head on.  

IT budgets at SMBs have grown 7 percent since the first half of 2012, according to a survey of more than 1,300 professionals conducted by Spiceworks, a software developer and online IT community that takes the pulse of SMB technology twice a year. The average annual SMB IT budget was $162,000, up from $152,000 reported in May.

The survey also found that the cost of provisioning and supporting IT is inversely related to the size of an organization.  SMBs with one to 20 employees spent $1,900 per employee on technology, more than twice the $700 per employee spent by organizations with more than 250 employees.

Much of the increase was fueled by the rapid growth in tablet adoption and the growing use of cloud services, the survey found.  More than half (53 percent) of SMBs support company-issued tablets on their networks, with an additional 12 percent planning to support them in the first half of 2013.

Cloud services are now used by 62 percent of SMB IT departments and is projected to rise to nearly three-quarters (73 percent) by midyear 2013, the survey found. The most popular cloud-based services are Web hosting, email hosting and data backup/recovery solutions.

Desktop and server virtualization, although not as widely adopted, are increasingly being evaluated by SMB IT departments.

Though IT professionals remain split on supporting bring your own devices, 59 percent of small and medium-size businesses have a BYOD initiative and support employee-owned computers, tablets or smartphones on their networks.  Businesses with fewer than 20 employees are most likely to fully embrace BYOD, with nearly three-quarters saying that they have an ongoing initiative.

"The world's SMBs continue to increase their investment in new technologies, including tablet devices, smartphones, cloud services and virtualization," said Jay Hallberg, co-founder and vice president of marketing for Spiceworks. "The results of our research bode well for the industry as new technologies become more pervasive and prompt IT departments to make additional investments."

Reach BusinessNewsDaily senior writer Ned Smith at nsmith@techmedianetwork.com. Follow him on Twitter @nedbsmith.We're also on Facebook & Google+

Ned Smith
Ned Smith

Ned was senior writer at Sweeney Vesty, an international consulting firm, and was Vice President of communications for iQuest Analytics. Before that, he has been a web editor and managed the Internet and intranet sites for Citizens Communications. He began his journalism career as a police reporter with the Roanoke (Va.) Times, and was managing editor of American Way magazine and senior editor of Us. He was a Captain in the U.S. Air Force and has a masters in journalism from the University of Arizona.

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