IT Spending Hits $3.8 Trillion! No Fooling, but Where is Value for SMBs?

By Shannon Belew
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With the first quarter of 2013 officially behind us, businesses of all sizes are  pausing to evaluate their plans for the rest of the year. If you are like most SMBs, you are paying particular attention to whether or not your budget is on track. One area of spending that may need to be adjusted is in how much is being slotted for technology investments. According to an updated forecast from analysts with Gartner, Inc., worldwide IT spending is projected to reach $3.8 trillion this year – an increase of just over 4 percent from 2012. Even if your company’s budget is only a fraction of the average SMB spend for IT, you want to invest in the solutions or services that provide the most value to your business.

Where are companies choosing to spend their IT budgets? Gartner tracks and reports trends across the hardware, software, IT services and telecom markets. The categories included in this particular report are devices, data center systems, enterprise software, IT services, and telecom services. Whereas data center systems and software are on the smaller side of budgeted spending, IT and telecom services categories account for the largest segments, forecasted at $918 billion and nearly $1.7 trillion, respectively. Two growing trends continuing to influence where and how dollars are spent in these categories include cloud and mobile.

“The Nexus of Forces — social, mobile, cloud and information — are reshaping spending patterns across all of the IT sectors that Gartner forecasts. Consumers and enterprises will continue to purchase a mix of IT products and services; nothing is going away completely,” said John Lovelock, research vice president at Gartner. “The ratio of this mix is changing dramatically and there are clear winners and losers over the next three to five years, as we see more of a transition from PCs to mobile phones, from servers to storage, from licensed software to cloud, or the shift in voice and data connections from fixed to mobile.”

There are lots of technology solutions and services competing for those dollars. Deciding how to get the most value for your money can be tricky, but doing a little due-diligence can go a long way in stretching the value of your investment, particularly when it comes to your business phone system. For most SMBs, the phone system has moved far beyond the simplicity of a dial tone. Advanced Unified Communications (UC) solutions allow your business to do more with less. Today, a solid UC system can increase efficiency, improve customer service, provide flexibility for employees, and save on overall telecom costs for your company.  In addition to increased benefits, there are also more choices in phone systems, with SMBs considering the pros and cons of a hosted PBX (UC cloud) solution verses a premises (on-site) system. As you are evaluating your IT budget and your phone system options, it’s recommended you incorporate the following into your due-diligence process:

1.  Complete a side-by-side feature comparison between vendor solutions and get clarification on which features are included in initial pricing and which features are considered “add-ons.” For example, there are business-critical features for which some vendors make you pay more – such as mobility. Additional licensing and support fees can also drive up costs, and are not always obvious in an initial bid.

2. Make a list of the pros and cons of multiple phone system options before narrowing down specific vendor options. Today, there are tangible, budget-friendly options that include traditional on-site business phone systems, hosted PBX solutions, and even open source systems, like Asterisk. Each option can provide advantages and risks. Because Digium provides all three alternatives, our VoIP specialists are able to help businesses evaluate:

  • Custom, open source solutions (Asterisk), which can provide great flexibility, especially if you have access to dedicated IT resources
  • On-site, out-of-the-box solutions, like Switchvox which offer business-critical UC features at an affordable price – this is particularly appealing to those businesses that want the flexibility of a custom solution, but may have limited in-house IT resources
  • Hosted PBX solutions which put your UC phone system in the cloud – this is an ideal fit for smaller companies that aren’t ready to invest in the infrastructure of a typical on-site system, but still need the features and flexibility that comes with a hosted option, such as Switchvox Cloud.

3. Ask about post-sales support, which can eat into your budget long after the system is installed. When comparing support options, consider the strength of the vendor’s channel program which can determine whether or not there is an approved reseller available to help with installation and on-going support; and ask about access to online training and support – which could help not only reduce the long-term cost of your phone system, but also help ensure you and your employees use the system to its fullest capabilities by understanding and using all or most of the UC features.

If you can spend a little extra time on the front-end of your purchasing decision asking the right questions, you are much more likely to make a more informed decision and ultimately increase the total value of your overall IT investment.  Considering Gartner is already forecasting IT spending to grow to nearly $4 trillion on 2014, it’s a safe bet that businesses will continue to need technology – so invest wisely.

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About the Author

Shannon Belew

Shannon Belew has worked with SMBs for more than 20 years and specializes in B2B digital marketing. Shannon leads the online marketing strategy for Digium and regularly writes about business and technology trends. She is the author of "Starting an Online Business For Dummies, All-in-One" (4th ed) and "The Art of Social Selling." Follow her on Twitter @ShannonBelew for the latest tech trends and business news on topics ranging from content marketing and social media to mobility and Cloud.

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