Small-Business Technology

Small-business owners are adjusting their budgets to accommodate technologies that enhance operational efficiency, customer service and sales. Advances in computer, network and communications technology have revolutionized such areas as accounting, payment processing, marketing and communications, lowering overall costs and giving a competitive edge when applied.

?Companies that do not keep up will get left behind,? says Ramon ?Ray, author and editor of, and author of Technology Solutions for Growing Businesses and Technology Resources for Growing Businesses. Private and public sector demand for related skills and expertise suggest a windfall for independent consultants, vendors, as well as job seekers.

International Data Corp., one of the world?s leading market intelligence firms, forecast that spending on information technology this year by U.S. small and medium-sized businesses will account for about a quarter of overall global IT spending by such businesses and more than 10 percent of all IT spending worldwide. IDC says IT spending by U.S. small and medium-sized companies has more than made up the ground lost during the economic rout of 2008 and 2009 and should exceed $138 billion in 2012. Small businesses alone will spend nearly twice as much as midsize firms on PCs and peripherals, with both types of firms showing ?particularly high levels of interest? in notebooks and media tablets.
Small and midsize businesses (SMB) will spend nearly $50 billion on packaged software in 2012, accounting for more than one-third of total U.S. IT spending by those businesses. More than one-quarter of total SMB IT spending in 2012 will be allocated to IT services, totaling more than $38 billion. ?While this level of spending is significant, it also represents a critical departure from the conventions of the large enterprise segment, where IT services account for nearly half of all IT spending,? IDC says. Systems and storage will continue to be the slowest-growing IT category in the SMB space. While small and midsize business interest in servers and storage is expected to remain strong, the appeal of virtualization is expected to slow the growth of the server-installed base, particularly in the midsize segment.

On the jobs and outsourcing front, U.S. employers definitely will be looking for skills in key computer technologies, especially in software, according to an industry outlook published on the employment website Rising costs and communications problems are making outsourcing to Asia less attractive than it was five years ago, industry analysts say. Here at home, the strongest markets for technology hiring, they say, are San Antonio, Texas; San Francisco and Silicon Valley in California; Seattle, Wash.; New York City; Baltimore; Greensboro, N.C.; and St. Louis, Mo. report titled ?2012 Technology Jobs Outlook? quotes John Reed, executive director of staffing firm Robert Half Technology in Menlo Park, Calif., as saying, ?At IT firms, virtualization, business intelligence and mobile app developers are really strong. App developers are really hot right now.? Other in-demand technology jobs cited in the report include sales application engineers, customer relations management (CRM) specialists, security experts, backup and recovery technicians, field application support specialists and service technicians. Demand ?for social media expertise is also increasing as more businesses seek to link their Web presence to a social media presence.
The picture is less rosy for suppliers to the federal government. With pressure on agencies to cut service-contract spending, demand for vendor-furnished IT services by the U.S. government will drop to $36.5 billion in 2016 from $39.5 billion in 2011, according to ?Federal Information Technology Services Outlook, 2011?2016.? The report says the following trends and drivers are impacting the federal IT services market:
? Agencies will continue to require custom software development even if the application operates in the cloud.

? Federal IT workforce gaps will cause a continued demand for IT education and training across all technology initiative areas.

? Shared services will drive more application sharing among agencies, which will increase the need for management of the shared applications.

? Information security will play an increasingly critical role in outsourced network services.

Overall, the U.S. tech market is being rejuvenated as the U.S. economy shows signs of improvement, reports market analysts Forrester Research. Forrester forecast growth of 7.5 percent in 2012 for the market and 8.3 percent growth in 2013. Combined business and government spending on information and communications technology, including telecom services, will increase by 7.1 percent in 2012 and 7.4 percent in 2013.
?The lead tech growth category will shift from computer equipment in 2011 to software in 2012 and 2013. Software growth will occur across all categories, but software-as-a-service (SaaS) applications, general business intelligence products and specialized analytical tools will have the strongest growth. These products will help push total software sales growth up to 11.4 percent in 2012 and 12 percent in 2013,? Forrester says.