June 30, 2005

2005 Update: US Enterprise And SMB IT Spending

Revised Data Raises SMB Share Of IT Spending Market

by Andrew Bartels

with Tom Pohlmann, G. Oliver Young

Executive Summary (This is a document excerpt)

In March 2005, Forrester published data on US spending by small and medium-size businesses (SMBs) and enterprises in 2004. In this report, we extend our analysis to 2005. We are also updating our 2004 data to correct for: 1) a slight overstatement of IT spending by enterprises and by professional services firms of all sizes, and 2) a comparable understatement of IT spending by SMBs and by financial services firms of all sizes. The major result of these changes is to increase for 2005 the share of IT spending by SMBs to 48% of all US IT spending — up from 44% in our earlier report. The secondary effect is to raise the share of US IT spending by financial services firms to 15% from 12% and to lower the share of professional services firms from 23% to 22%.

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