|
There
are several reasons to expect relatively stronger
IT spending in the U.S. midmarket vs. large business.
These are just some of the market drivers that indicate
that growth rates for midsize businesses (MSBs) will
outpace larger companies in the budding technology
market recovery:
• |
Financial
Conditions
Projections by financial analysts for
the past year or more have pointed toward faster
profit growth for small-capitalization companies
than for large-capitalization ones. MSBs have
also increased their share of total business wealth
in the past several years, reversing earlier losses.
Reflecting these signs of health, banks were less
likely to tighten credit conditions for MSBs than
for large businesses during the economic downturn.
Although money remains tight, MSBs have less debt
burden than larger companies and are in a better
position to use improved cash flow for technology
purchases. |
• |
Business Confidence
Midsize business owners have been more buoyant
at times for the past several years, and Gartner
research shows that midsize companies cut IT spending
more precipitately when the recession hit, so
they are likely to be quicker on the uptake. |
• |
Tax Law Changes
Tax breaks for first-year depreciation, enacted
in March 2002, may also affect spending trends
by company size. Now that profits are recovering,
more companies can take advantage of the increased
write-offs. Technology may benefit more than other
spending categories because it has a shorter useful
life, which is offset by the larger deductions.
|
• |
Increased Vendor Attention
Saturation of the large enterprise market, fueled
with a struggling economy, has resulted in more
(and more affordable) IT products and services
for MSBs. IT prices have fallen, which makes some
technologies affordable to MSBs now that simply
weren’t options in the past. Also, more
technologies have been customized for MSBs’
specific needs. |
Midsize
Enterprise Summit is where Senior IT Executives
and Vendors do business in a proven, effective format.
Through Private Boardroom Appointments, World Premiere
presentations, meetings in the Showcase, and a variety
of networking opportunities, you can deliver your
midmarket message and solutions to a prequalified
audience of senior IT executives. Click
here to learn more now.
Reference
Research Note
Small and Midsize Businesses Stage Recovery in
IT Spending
Publication Date: September 18, 2003
Author: Lewis Clark, Jim Browning, and Rob Brown
|
