2007 SMB IT Budget Outlook: Europe

The positive outlook for small and medium businesses (SMBs) has fallen; in 2006, 53% of firms reported a good outlook, but that dropped to 47% in 2007. This gloominess translates into a 1% decrease in overall IT budgets. R&D spending will rise to 5% of the total IT budget, but spending on new investments will remain flat at 28%. If we break down the IT operating budget, computer hardware and full-time IT staff consume the largest share, with 23% each. SMBs will spend more on Web applications and security than in 2006. They will also increase their budget for storage products and server hardware. IT services spending will remain static for the majority of the SMB respondents. The No. 1 IT priority of the year will be to replace or upgrade server hardware; the No. 1 business priority will be to improve IT's efficiency; and the IT services focus will be on curtailing IT services spending. Three-quarters of SMBs use financial justification methods, but in general, medium businesses use methodologies more widely than small businesses.