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December 12, 2005

Yankee Group Studies SMB CRM, IT Spending

By David Sims, Contributing Editor

Boston-based market research firm Yankee Group has announced the results of three small and medium business surveys, including the 2005 SMB Applications and Web Survey, the 2005 SMB Communications, Broadband and VoIP Survey, and the 2005 SMB Infrastructure Survey.
The study found that in 2005, spending on IT ranged from $16,500 for two to 19 employee companies to $821,000 for mid-market enterprises with 500 to 1,000 employees.
And in 2005, the US SMB and mid-market-focused web hosting market was $4.4 billion and growing at a rate of 6%. The market for online marketing and advertising was $1.3 billion and growing at a rate of 49%.
The Yankee Group also found that software-as-a-service is gaining ground in the business applications market, as more than 60% of SMBs attribute "lower expense rates" and "increases in productivity" as driving factors for adopting software-as-a-service.
The Yankee Group "2005 Small & Medium Business Applications and Web Survey" focuses on SMBs' current and planned use of business applications, including accounting, CRM, ERP, as well as software-as-a-service.
The study found that security and backup are the top two most challenging IT issues facing SMBs, and that the primary obstacle to addressing these IT issues is price. Other major obstacles are "high implementation time," "lack of IT staff" and "concern that one upgrade will trigger other upgrades."
SMBs are in need of security protection as complements to their broadband service, Yankee Group analysts conclude, as more than 60% manage their own messaging needs because of privacy and data security concerns.
Representing what Group officials claim is "the most comprehensive view of the SMB market," the 2005 Yankee Group SMB surveys offer data and analysis into operational and technology challenges of SMBs, as well as "requirements, spending and preferences for vendors and channels for 2006."
Applying "proprietary Yankee Group methodology and drawing from data gleaned from SMBs with two to 1,000 employees," according to company officials, each of the three surveys is being marketed as providing IT vendors with "current market trend analysis, allowing them to gain an in-depth understanding of SMB market motivators, decision influencers and behaviors regarding communications technology, business applications and web services and infrastructure and storage, respectively."
David Sims is contributing editor for TMCnet. For more articles please visit David Sims' columnist page.


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