Europe's SMEs flash the IT cash

Soaring investment

The corporate sector may be torched, the retail punters may be keeping their wallets firmly touched, but small and medium-sized businesses (SMEs) may just save the day for beleagured IT companies.

European SME investment in IT is expected to rise from $76 billion in 2002 to $109 billion in 2006. Expected by whom? Step forward, UK research firm Datamonitor which pinpoints IT services as the fastest growing spend.

Of course, SMEs are notoriously difficult, and expensive, for IT vendors to sell to. This is one reason why the SME market is the least consolidated, so far as vendor share is concerned. Another reason is, as Datamonitor points out, SMEs tend to lean more upon their resellers than upon vendors direct. So it is vital for vendors to cosy up to resellers and telcos if they want to grab a slice of this market.

According to Datamonitor, the SME sector has survived the downturn better than most enterprise sectors.

"Ironically this could be due to their previous lack of investment in technologies and general reticence to spend on IT processes they see as non-essential."

But now IT investment is beginning to build momentum. So far as hardware and networking infrastructure is concerned, Western SMEs are "relatively advanced". The focus on investment is shifting to "software, telecoms and IT services. Investment by SMEs in IT services will demonstrate the greatest growth with an expected CAGR of 13% between 2001 and 2006."

There's more from Datamonitor here. ®

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