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57% of A/NZ SMBs are out of survival mode

In Q1 2022, IDC surveyed 1011 small and medium businesses* across Australia and New Zealand (A/NZ) to understand their priorities, challenges, and planned technology investments in 2022. The survey found that 57% of A/NZ SMBs have moved through the pandemic-related crisis and out of survival mode. These organisations have shifted into either growing and transforming their business or are now thriving in new modes of operation.

“The majority of SMBs in A/NZ are now optimistic about the future,” says Emily Lynch, Senior Market Analyst, Research & IT Services at IDC A/NZ, “Cloud, collaboration, and cybersecurity are key pillars of investment for A/NZ SMBs. These organisations are seeing the gains of these investments in improving productivity, time to market, and leveraging new digital technologies. Notably, we see that SMBs are deriving increasing percentages of revenue via digital channels.”

In 2022, two thirds (67%) of Australian SMBs indicate higher IT spending; nearly as many New Zealand SMBs expect to increase their IT spending, at 62%. This is up from last year, particularly for New Zealand, where only 43% of SMBs expected to increase their IT spending. This illustrates the increasing confidence as SMBs negotiate pandemic impacts and recognise how digital transformation is essential moving forwards. IDC anticipates spending in cloud, cybersecurity, and laptops/PCs to increase the most.

With spend on productivity and collaboration solutions not far behind the top three areas, it is clear that SMBs are optimising their operations for hybrid working. This creates opportunities for vendors and service providers serving the SMB market.

Trends towards expanding application portfolios and increased complexity of deployments across cloud and on-premises environments will continue to create integration challenges for ANZ SMBs. These integration challenges, as well as ongoing management and support needs provide the largest opportunities for vendors in the SMB space. Providers with strong end-to-end messaging and capabilities across areas such as security, automation, and industry compliance stand to capture this demand, where SMBs’ in-house expertise is likely to be inadequate to support the growing needs of the organisation.

“The impacts from COVID-19 have forced many SMBs to accelerate their digital transformation journey, and many have high aspirations in this space. However, some won’t have the scale for the in-house digital skillsets required for success,” says Monica Collier, Associate Research Director at IDC A/NZ, “Also, a key frustration for many SMBs is where their service provider lacks the ability to help them with business strategy. Service providers that can bridge this gap between technical expertise and business strategy expertise will have a market advantage.”

CT Bureau

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