Products such as the iPhone likely will only make this trend worse: in a recent study, six in 10 family-run businesses reported there have been disagreements between older and younger generations about how to invest in technology.
Microsoft conducted the study of more than 250 small businesses and found that older generations are less likely to spend on technology unless it directly impacts the bottom line, while younger generations see technology investments as a way to keep up or stay ahead of the competition. Younger respondents also were more likely to spend on mobile technology.
Overall, the majority, or 83%, of small-business owners said they were satisfied with recent technology investments. However, satisfaction was at 93% for owners under age 50, compared with 78% among owners ages 50 to 64, and 67% among owners age 65 and older.
Internet access and personal desktop computers were the most popular technology used by small, family businesses. Seventy-eight percent of small, family businesses have Internet access, and three in four have a PC, according to the survey. Small family business owners get advice on technology from a variety of sources, including friends and family (29 percent), professional colleagues (24%) and technology consultants, retailers or manufacturers (24%). Owners who get information from technology sources are more likely to be satisfied with their investments in technology (95% satisfied) than those who get information from colleagues (88%) and friends and family (75%).
The predominant technologies in small family businesses, according to respondents, are Internet access and personal desktop computers. Seventy-eight percent of small family businesses have Internet access, and three in four have a PC. Companies with six or more employees are more likely to have Internet access (90%) than those with fewer employees (77%). The age and revenue factors come into play again with regard to their reliance on mobile technology, with 76% of younger respondents and 79% of higher-revenue businesses depending on wireless devices.
When it comes to spending on technology, small family business owners are most likely to spend the biggest slice of their budgets on hardware such as PCs and laptops and industry-specific software. Companies that are increasing their tech budgets in 2007 are more likely to be buying PCs (49%) than those companies whose budgets will remain the same (32%) or those spending less than they did last year (27%).
SMB business trends are important to vendors as they look to provide services and solve problems related to a largely untapped market. For example, IBM CEO Sam Palmisano recently said: “In two to three years, SMB will be the largest industry for us…..SMBs will be “the biggest IT growth opportunity in the world today,” valued at $487 billion, with the global market currently growing at 6.5% annually.
A report out earlier this year said Small and midsized businesses in North America expect to increase their IT spending by an average of only 2% this year after going on an 8% spending spree in 2006, according to a Forrester Research survey. The survey of about 1,200 businesses with six to 999 employees showed that 62% of them have an optimistic outlook for their companies this year, up from 46% in a 2006 survey.
IT spending will focus on new hardware purchases and added personnel. Hardware spending is expected to focus on replacing or upgrading servers and the regularly scheduled replacement of about 25% to 30% of companies’ desktops and workstations. Software purchases will be mostly of network security and Web application products.
Twenty percent of IT managers surveyed said improving the efficiency of their IT systems is a top priority, and 33% of them are focused on measuring the impact of their IT spending on business performance.
