State of SMB IT 1H 2013

S e m i - A n n u a l R e p o r t O n S m a l l A n d M i d s i z e B u s i n e s s Te c h n o l o g y P l a n s & P u r c h a s e I n t e n t

Spiceworks Inc., 7300 FM 2222, Bldg 3, Ste 100, Austin, TX 78730 Website: www.spiceworks.com/marketing
Tel: 1-512-628-8280 • Fax: 1-866-567-2744 Email: [email protected]
IN THIS REPORT Executive Summary
Executive Summary 2
According to our most recent survey, many SMBs have seen their budgets increase in the last six months,
For many SMBs, IT budgets are on the uptick 3 leading to ramped up spending on end-user devices and cloud services.
Staffing plans have plateaued 4
Four key survey findings:
Cloud services have become a substantial line item 5
When it comes to hardware, purchases trump upgrades 6 Budgets & Spending: IT budgets have seen a dramatic boost in all but the largest SMBs.
New software purchases take a back seat 7 The average annual IT budget is now $192,000 – up $30,000 from the second half of 2012.
Smaller SMBs are leading the charge into the cloud 8 SMBs with fewer than 250 employees are seeing the biggest budget increases, while
companies with 250 to 999 employees show a decline. However, hiring remains largely flat,
Cloud services are not just for IT pros 9
with the bulk of the increased budget going to new end-user hardware purchases and, to a
Server virtualization has still not reached its peak 10 lesser extent, new cloud-based and hosted IT services.
Workloads of all types are fair game for virtualization 11
IT pros anticipate a tidal wave of tablets 12 Cloud: Cloud-based and hosted IT services have found a home in SMB.
While cloud services appear to have held steady over the last six months, with just over 60%
Smartphones are still in the game 13
of respondents using them, survey results suggest that cloud services are headed for a new
Background & Methodology 14
peak of 66% in the second half of 2013. The smaller the SMB, the more likely they are to be
using cloud services. Smaller SMBs are also using the greatest number of cloud services.

Virtualization: Server virtualization has reached new heights.

Adoption of server virtualization continues to increase unabated, with 72% of respondents
Voice of IT
TM

now using server virtualization – an increase of seven percentage points since the second
half of 2012. What’s more, a full 80% plan to be using sever virtualization within the next six
About Spiceworks Voice of IT®
months. EMEA leads in this category, with 80% average usage compared to 73% in North
The Spiceworks Voice of IT® market Insights program America. Unlike with cloud services, however, the larger the SMB, the more likely they are to
publishes stats, trends and opinions collected from small and
medium business technology professionals that are among
be using server virtualization.
the more than 2.4M users of Spiceworks. Survey panelists
opt-in to answer questions on technology trends important
to them. Mobile: Tablets are quickly gaining ground in SMB networks and budgets.
To receive updates on future research, follow Spiceworks Tablets continue to be the driving force in mobile tech, with 59% of respondents reporting
Voice of IT on Twitter at @VoiceOfIT. that they have tablets on their network. This figure is up six percentage points from just six
To learn more about Spiceworks’ research programs and months ago, and it’ll likely continue to rise; 70% of respondents predict they’ll have tablets on
services, contact [email protected].
their network in the second half of 2013. While smartphone adoption has leveled off, survey
results suggest that those devices are headed for a new peak this year as well.

2
For many SMBs, IT budgets are on the uptick.
The average annual IT budget is now $192,000, which is up $30,000 from the second half of 2012. SMBs with fewer than 250 employees are seeing
the biggest budget increases. In fact, organizations with fewer than 20 employees have seen their annual IT budgets almost triple, increasing from
$19,000 to $54,000 on average. Organizations with 20 to 249 employees are showing modest increases, while those with 250 to 999 employees
show a decline. In general, annual IT budgets for SMBs in North America are increasing more than for their counterparts in Europe, the Middle
East, and Africa (EMEA).

$192
$162
Average Planned Budgets Over Time
Budgets shown in thousands of dollars. F R O M T H E CO M M U N I T Y

$152
I think we are spending
enough this year. We are

$143 investing in technology that

we need and leveraging that

$122 $132
technology to help reach our
company goals.

$117 1H 2010
JoeMats
IT Director
http://community.spiceworks.com/
topic/312143-informal-it-budget-
2H 2010 survey-are-you-spending-enough-
or-too-much
1H 2010
1H 2010
1H2010
2010 12 2010 2H
1H 2010
2011 2H 2010 1H 2012 2H 2012 1H 2013
1H 2H 2010
Average Planned Budgets by Company Size Over Time Average Planned Budgets by Region Over Time

$420 $367
$216 $258
$96 $124
$54
$19
$174 $203
$151 $153
Less than 20-99 100-249 250-999
20 employees employees employees employees NORTH AMERICA EMEA
2H 2012
1H 2013 2H 2012
1H 2013

3
 Staffing plans have plateaued.
Despite increased budgets, hiring remains largely flat across all sizes of SMBs, with only 22% planning to add staff within the next six months.
SMBs in North America are planning to add staff at a slightly higher rate than those in EMEA (23% compared to 19%).
The majority of respondents (69%) are neither adding nor reducing staff, which is up from 61% in the second half of last year. Only 3% of
respondents say their organizations are planning to reduce headcount.

Q. What are your staffing plans for your IT department over the next 6 months?
Staffing Plans Over Time Staffing Plans by Region

69% NORTH AMERICA

61% 69%
57% 56% 23%
5%
31% 30%
3%
26%
EMEA
10% 22% 73%
9%
8% 19%
4% 4% 4%
4% 6%
3% 4%
2H 2011 1H 2012 2H 2012 1H 2013
Staying the same Adding Don’t know Reducing
Staying the same Adding Don’t know Reducing

Staffing Plans by Company Size

6% 4% 3% 7% 2% 7% 2%
6%
Staying the same 16%

Adding 23% Less than 20-99 24% 100-249 32% 250-999

Don’t know 20 employees employees employees employees
Reducing

65% 77% 67% 59%

4
 Cloud services have become a substantial line item.
For the first time, the latest State of SMB IT survey provided a separate category for capturing IT budget spent on hosted/cloud-based services.
Spending percentages in both the software and IT services categories were diverted to the new category, resulting in lower percentages for those
categories compared to the second half of 2012. Hosted/cloud-based services currently represent 12% of annual IT budgets in North America
and 11% in EMEA. Organizations with fewer than 20 employees are allocating significantly more budget to hosted/cloud-based services than
organizations with 20 employees or more (19% compared to 11%).
Q. What cloud-based/hosted services do you use today or plan to start using within the next 6 months?

Allocation of Annual Budget Over Time Allocation of Annual by Region

NORTH AMERICA
47%
42% 39%
40% 41% 40%
40%
30%
39%
35% 34% 33% 34% 34% 18%
34%
30% 12%
26% 26% 26% 26% EMEA
23%
39%
19% 19% 30%
12% 20%

1H 2010 2H 2010 1H 2011 2H 2011 1H 2012 2H 2012 1H 2013 11%

Hardware Software IT Services Hosted/Cloud-based services Hardware Software IT Services Hosted/Cloud-

based services
Allocation of Annual Budget by Company Size

19% 11% 11% 11%

Hardware 20%
18% 19%
Software Less than 37% 20-99 39% 100-249 39% 250-999 41%
20 employees employees employees employees
IT Services 19%
Hosted/Cloud-
based services
25% 32% 30% 29%

5
When it comes to hardware, purchases trump upgrades.
SMBs are more likely to purchase new devices than upgrade existing ones, especially in the case of end-user devices. Sixty-five percent of respondents
say they’re planning to purchase both desktops and laptops within the next six months. Respondents are also planning to purchase more tablet
computers than they have in the past, with 42% planning a tablet purchase compared to 38% in the second half of 2012.
Purchases trump upgrades when it comes to servers, as well. Forty-six percent of respondents are planning to purchase new servers, while only
24% are planning to upgrade existing ones.

Q. Which of the following hardware products do you plan to purchase or upgrade over the next 6 months?
Top 5 New Hardware Purchases Over Time

2H 2011
1H 2012
65% 65%
63% 64% 63% 2H 2012
1H 2013
55% 60%
53% 53%
45% 46% 48%
44%
42% 42%
38%
30% 30%

N/A N/A
Desktop Computer Laptop/Notebook Server Monitors/Digital signage Tablet Computer
Computer

Top 5 Hardware Upgrades Over Time

2H 2011
35% 1H 2012
30% 30% 2H 2012
29% 28% 29%
27% 1H 2013
24%
22% 22% 22% 21% 22%
20% 21% 20% 19% 20% 21% 19%

Desktop Computer Laptop/Notebook Server Wireless Networking Storage/SAS/NAS

Computer
11%
6
New software purchases take a back seat.
A smaller number of respondents are planning to make new software purchases within the next six months. Many more are planning to upgrade or
renew existing software, indicating that IT organizations are satisfied with their current vendors in specific software categories. For example, 13% of
respondents are planning to purchase new anti-virus/anti-spam software, but nearly four times that number (51%) are planning to upgrade or renew
their existing software.

Q. Which of the following software products do you plan to purchase, upgrade and/or renew over the next 6 months?
Top 5 New Software Purchases Over Time

2H 2011
1H 2012
2H 2012
1H 2013

20%
18% 18% 17% 16%
16% 16%
14%
12% 12% 13% 12% 12% 14%
11%
9% 10% 9% 9%
8%

Anti-virus/Anti-spam Backup/Recovery Productivity Suite Virtualization Email Client

Top 5 Software Upgrades/Renewals Over Time

2H 2011
DID YOU KNOW?
1H 2012
54% 52% 54% 2HThere
2012 are over 425,000
51% software titles in Spiceworks.
1H 2013
37% 39% 38% 37% 35% 34%
39% 39% 37% 35% 39% 37% Are you a tech vendor with a question
31% 32% about software? Let us find the answer.
28% 30% [email protected]

Anti-virus/Anti-spam Backup/Recovery ProductivitySuite Virtualization Email Client

7
 Smaller SMBs are leading the charge into the cloud.
While cloud-based/hosted services have leveled off recently, survey results indicate they’re heading for a new peak. Sixty-one percent of respondents
are using cloud-based/hosted services today, but an additional 5% are planning to implement these kinds of services within the next six months.
The smaller the organization, the more likely they are to use cloud-based/hosted services. Sixty-nine percent of SMBs with fewer than 20 employees
use these services, compared to 55% of those with 250 to 999 employees. North American SMBs are more likely to use these services than EMEA (64%
compared to 56%), but that gap appears to be closing.

Q. Do you use any cloud-based/hosted services today?-

Cloud Adoption Over Time Cloud Adoption by Company Size

Current Usage Planned Usage (in next 6 months)

74%
62% 61% 66% 69% 70%
63%
57% 61% 55%
60%
48%
46%

28%

Less than 20 20-99 100-249 250-999

employees employees employees employees
14%
Current Usage Planned Usage (in next 6 months)
2H 2010 1H 2011 2H 2011 1H 2012 2H 2012 1H 2013 2H 2013

Cloud Adoption by Region

F R O M T H E CO M M U N I T Y
The top two reasons that I like hosted services:
1. Security - Regardless of any concerns, enterprise
hosting environments dramatically outstrip SMB shops
in average security...2. Availability - The model changes
but the ability to keep your company alive and kicking
68% even when a single site goes out (power, ISP, weather,
64%
56% 62% emergency, etc.) is unbelievable.
NORTH AMERICA EMEA
Scott Allan Miller
IT Strategist and Manager
Current Usage http://community.spiceworks.com/topic/337812-who-s-afraid-
of-the-big-bad-cloud
Planned Usage (in the next 6 months)

8
 Cloud services are not just for IT pros.
As a new survey category shows, not only are smaller organizations more likely to use cloud-based services, they’re also more likely to be using a
greater number of services. SMBs with fewer than 20 employees are running the greatest number of cloud-based services (an average of 5.3 services)
and are likely to be running the greatest number six months from now. While backend services such as web hosting, email hosting, and online
backup/recovery are among the most popular cloud-based/hosted services used, end user-facing services such as productivity solutions, sales
support, and business applications are gaining a foothold.

Q. What cloud-based/hosted services do you use cloud computing for today or plan to start using the cloud for within the next 6 months?

Usage of Cloud-Based Hosted Services Average Number of Cloud-Based Services Being Used
Web Hosting 79% 83% Average Average Number
Number Today in Next 6 Months % Increase
Email Hosting 55% 64%
All Respondents 4.2 4.8 14%
Productivity Solutions 46% 60% Less than 20 employees 5.3 6.1 15%
Content Filtering 53% 58% 20-99 employees 3.9 4.6 18%
Online Backup/Recovery 40% 56% 100-249 employees 3.8 4.4 16%
250-999 employees 4.0 4.7 18%
Application Hosting 41% 49%

Sales Support 24% 31%

North America 4.3 4.9 14%
Industry-Specific Applications 26% 30%
EMEA 3.8 4.5 18%
Business Support 19% 26%

Hosted VoIP 16% 23%

Infastructure 16% 22%

Development 8% 11%

Other Hosted IT Services 32% 39%

Current Usage
Planned Usage (In next 6 months)

9
 Server virtualization has still not reached its peak.
Server virtualization adoption continues its upward trend, jumping seven percentage points since the second half of 2012 – from 65% to 72%. What’s
more, an additional 8% of respondents are planning to implement server virtualization within the next six months, which would bring the adoption
total to 80%.
Unlike cloud services, where smaller organizations are leading the way, larger organizations are leading the pack when it comes to server
virtualization. While just over half of SMBs with fewer than 20 employees are using server virtualization, 81% of SMBs with 250 to 999 employees are
using it. EMEA leads North America in this category by a distinct margin – a gap that’s likely to persist.

Q. Do you virtualize any of your servers today?

Server Virtualization Adoption Over Time Server Virtualization Adoption
by Company Size
80%
Current Usage Planned Usage (in next 6 months) 72% 87%
65% 84% 82% 81%
61% 64% 74%
75%

54% 60%
52% 53%

Less than 20 20-99 100-249 250-999

employees employees employees employees
2H 2010 1H 2011 2H 2011 1H 2012 2H 2012 1H 2013 2H 2013 Current Usage Planned Usage (in next 6 months)

Server Virtualization Adoption by Region

DID YOU KNOW?
Government is more likely to be
virtualizing than other industries.

83% Are you a tech vendor with a question about

80%
virtualization? Let us find the answer.
73% 75% [email protected]

NORTH AMERICA EMEA

Current Usage
Planned Usage (in the next 6 months)

10
 Workloads of all types are fair game for virtualization.
The latest survey reflects an updated category for capturing the types of workloads being virtualized and those in the planning stages. Roughly
three-quarters of respondents are virtualizing IT services such as storage, printing, domain services, security, and inventory. More than half are
virtualizing end user-facing workloads such as productivity tools, industry-specific applications, and business support applications such as ERP,
accounting, and HR. Virtualization rates across all types of workloads are projected to increase within the next six months. In keeping with server
virtualization adoption trends, the largest SMBs are virtualizing the greatest variety of workload types.

Q. Which of the following workloads do you run or plan to start running within the next 6 months on your company’s virtual servers?
Types of Workloads Being Virtualized Average Number of Types of Workloads Being Virtualized

IT Services Average Average Number

(Storage, Printing, Domain) 76% 88% Number Today in Next 6 Months % Increase
Internal IT All Respondents 5.5 5.9 7%
(Security, Inventory) 74% 85%
Less than 20 employees 5.5 5.7 4%
Productivity Applications 60% 72%
(Collaboration, Email) 20-99 employees 5.2 5.7 10%
Industry-Specific Applications 56% 66% 100-249 employees 5.6 6.0 7%
Business Support 250-999 employees 6.0 6.4 7%
(ERP, Accounting, HR) 55% 66%
24% Development
(Engineering, Software Development)
52% 59% North America 5.6 6.0 7%
26% Content Publishing EMEA 5.4 5.7 6%
(Blog, Streaming, Knowledge-Base, Support)
49% 58%
19% Sales Support 38% 46%
(CRM)

Other Database 65% 77%

Other 43% 50%

Current Usage
Planned Usage (In next 6 months)
32%

11
 IT pros anticipate a tidal wave of tablets.
Use of tablets in the workplace continues to increase at a rapid clip, with 59% of respondents reporting that they currently have tablets on their
network. This number represents an increase of six percentage points from 53% in the second half of 2012, and survey results indicate that this
number could swell to 70% within the next six months. Tablets are used by the majority of SMBs, regardless of the size of the organization, although
they’re more likely to be used in North America than in EMEA.
Q. Do you have tablets (like iPads) on your network today?
Tablet Adoption Over Time Adoption of Tablets Over Time by Company
Less than 20 employees 20-99 employees
Size
Less than 20 employees 20-99 employees
Current Usage Planned Usage (in next 6 months) 2H 2012 48% 2H 2012 49%
70% 2H 2013
1H 48%
2012 64% 2H 2013
1H 49%
2012 57%
59% 1H 2013
2H 64%
2013 73% 1H 2013
2H 57%
2013 67%
53% 2H 2013 73% 2H 2013 67%

43%
100-249 employees 250-999 employees

100-249 employees 250-999 employees

33% 2H 2012 57% 2H 2012 62%
2H 2013
1H 2012 57%
57% 2H 2013
1H 62%
2012 61%
1H 2013
2H 2013 69%
57% 1H 2013
2H 61%
2013 74%
2H 2011 1H 2012 2H 2012 1H 2013 2H 2013 2H 2013 69% 2H 2013 74%

Tablet Adoption by Region F R O M T H E CO M M U N I T Y

We use them for our field service technicians.
They use it for email, clocking into jobs, T&E
filing, sharing photos with the home office.
The tablets have been a huge hit. The users
find them much more friendly for these tasks.

Sharon6787
73% Network/Systems Admin
62% 62% http://community.spiceworks.com/topic/241802-
what-is-a-tablet-good-for
50%

NORTH AMERICA EMEA

Current Usage
Planned Usage (in the next 6 months)

12
 Smartphones are still in the game.
As tablets have taken off, smartphone adoption has hit a plateau, with 60% of respondents reporting that they manage smartphones on their
network compared to 59% in the second half of 2012. Depending on the size of the organization, smartphone adoption has actually declined in
some cases. However, respondents in SMBs of all sizes anticipate that smartphone adoption will increase within the next six months, which would
bring the adoption total to 68%.

Q. Do you manage smartphones on your network today?

Smartphone Adoption Over Time Adoption of Smartphones Over Time by Company Size
Less than 20 employees 20-99 employees
Less than 20 employees 20-99 employees
Current Usage Planned Usage (in next 6 months) 2H 2012 54% 2H 2012 61%
2H 2013
1H 54%
2012 59% 2H 2013
1H 61%
2012 59%
68% 2H 59%
1H 2013 67% 2H 59%
1H 2013 66%
2H 2013 67% 2H 2013 66%
60%

100-249 employees 250-999 employees

59%
100-249 employees 250-999 employees
2H 2012 64% 2H 2012 62%
2H 2013
1H 2012 65%
64% 2H 2013
1H 62%
2012 57%
1H 2013 73%
2H 65% 2H 57%
1H 2013 66%
2H 2013 73% 2H 2013 66%

2H 2012 1H 2013 2H 2013

BYOD is heating up.
Smartphone Adoption by Region Check out our latest VoIT report:
As BYOD Becomes Mainstream,
Complexity Intensifies for SMBs

72%
68%
61% 65%

NORTH AMERICA EMEA

Current Usage
Planned Usage (in the next 6 months)

13
 Background & Methodology
The State of SMB IT Report is a semi-annual study conducted and released by the Spiceworks
About Spiceworks
Voice of IT® market insights program, which publishes stats, trends and opinions collected from
Spiceworks™, is the world’s largest small and midsize business technology professionals who are among the more than 2.4 million
IT Service Provider Education Non-Profit Construction Consulting
vertical network for IT that connects 2.4 users of Spiceworks. Retail

million IT professionals with more than

1300 technology brands. By combining
18%1H 20139%State of
The 7% SMB7% 6% eighth
IT is the 6% edition
6% 4% of4%this 3% 3%which is designed to keep an active
3%study,
a community of IT pros with free IT pulse on the happenings of small and midsize business IT professionals Software and IT departments.
Manufacturing Healthcare Finance Government Engineering
management software, Spiceworks helps Responses to this latest survey were collected from 1,000 IT professionals around the world in
businesses discover, buy and manage
organizations with fewer than 1,000 employees.
more than $425 billion technology
products and services each year. Company Size Region
For more information visit:
http://www.spiceworks.com/marketing 18% 16% 1% 6% Asia Pacific
250 to 999 Less than 20 employees Latin America
employees
North America
20-99 employees

Want to use data from this report? 25%

Go to www.spiceworks.com/voice-of-it/terms
Published on May 29, 2013
28% 38%
EMEA

68%
100-249 employees

Industry (Top 12 Industies Shown)

IT Service Provider Education Non-Profit Construction Consulting
Retail

18% 9% 7% 7% 6% 6% 6% 4% 4% 3% 3% 3%
Software
Manufacturing Healthcare Finance Government Engineering

Copyright Notice

The contents in this report are a result of primary research performed by Spiceworks. Unless otherwise noted, the entire contents
distributed as part of this report are copyrighted by Spiceworks. As such any information made available by any means in this report may
not be copied, reproduced, duplicated, published, displayed, transmitted, distributed, given, sold, traded, resold, marketed, offered for sale,
18% derivative works
modified to create 16% or otherwise exploited for valuable consideration
1% 6% without
Asia Pacific
prior written consent by Spiceworks.
250 to 999 Less than 20 employees Latin America
employees
This report contains information of fact relating to parties other than Spiceworks. Although the information have been obtained from, and
are based on sources that Spiceworks believes to be reliable, Spiceworks does not guarantee the accuracy,
20-99 employees and any such information might
North America
be incomplete or condensed. Any estimates included in this report constitute Spiceworks’ judgment as of the date of compilation, and are
25%
subject to change without notice. This report is for information purposes only. All responsibility for any interpretations or actions based on
the information or commentary contained within this report lie solely with the recipient.

All rights reserved. 2013.

Spiceworks Inc., 7300 FM 2222, Bldg 3, Ste 100, Austin, TX 78730 28% 38%
EMEA
Website: www.spiceworks.com/marketing
Tel: 1-512-628-8280 • Fax: 1-866-567-2744
68%
Email: [email protected]
100-249 employees
14