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$12bn tech spend for UK SMEs in 2007
…rising costs pressure and outsourcing on the up

By Nick Heath

Published: Monday 14 January 2008

Rising technology costs saw SMEs in the UK spending $12bn on IT last year.

SMEs upped their IT spending by eight per cent in 2007, with increased outsourcing of IT among small businesses, according to a study by Access Markets International Partners.

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The survey classed small businesses as companies with up to 99 employees, and medium-sized businesses as companies with 100 to 999 employees. Medium-sized businesses outspent small businesses in most areas of IT in 2007, with the highest spending in storage services ($388m) - up 20 per cent from 2006 - and managed security services ($42m).

IT spending included computing, software and networking support, together with professional services such as IT consulting and IT management.

Peter Scargill, IT chairman for the UK's Federation of Small Businesses (FSB) , agreed SMEs face increasing pressure from rising technology costs.

He said: "The amount of spending continues to go up every year as new opportunities emerge in IT. Now it is pretty much inescapable for most companies to have some sort of IT equipment, whether it is kitting out a small office or ensuring there is an email audit trail.

"Almost all companies I come across now would have some sort of content management system, ranging from Outlook to full-blown CRM [Customer Relationship Management]."

The FSB relies on an outside company to provide IT support and Scargill said outsourcing is vital for small businesses to have access to a sophisticated pool of IT knowledge.