Where SMBs Say They Will Spend More on Communications

It always is difficult to predict how user behavior might change, especially at economic turning points. The danger is "overshoot," the tendency to extrapolate future trends from immediate past trends, even when the direction and magnitude of behavior has reached some sort of turning point.


Complicating matters is that not all the data are consistent. Small business optimism is quite low, says the National Federation of Independent Business, as small business owners continue to anticipate difficult selling, capital, and political environments. Unlike unemployment, which is a lagging indicator, small business optimism is a leading economic indicator. So NFIB data suggests trouble ahead, even though other economic indicators suggest a recovery is underway.

But that does not seem to be affecting higher SMB demand for some products. About 28 percent of SMBs believe smartphones are the most important tech priority in the next 24 months. Also, 22 percent of SMBs believe mobile-enabled applications are the most important tech priority.

Among the likely areas of interest are front-end applications like customer relationship management, merchant solutions and sales force automation. That noted, many other potential investments seem to be getting shorter shrift.

Though more optimistic about the need for mobile-related technology, the recent Yankee Group (News - Alert) survey also suggests SMBs are re-thinking other forms of new technology adoption, for example. Asked whether they expected "severe reductions in technology investment" over the next year or two, 18 percent expect slowdowns in cloud computing or hosted services, 15 percent expect less unified communications spending while 14 percent expect lower WAN-related spending, says Steve Hilton, Yankee Group analyst.

At the same time, 63 percent of SMBs have cut back on travel, 51 percent have started using equipment more carefully, and 26 percent have increased the number of conference calls.

Fairly clearly, audio conferencing is being used to some extent in place of travel. About seven percent of SMBs report they have increased their use of video-based calls.