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SMB's are preparing for massive IT services and software shift

Over the next few years, there is an expectancy that more software and services will be sold that hardware.

The IDC predicts that over the next four years the small and medium-sized business sector will have continued and healthy growth in IT spending. The total expenditure expected in 2017 will approach $568 billion and will increase by over $100 billion by 2021.

The annual growth rate will be 4.5% per year by businesses with less than 1,000 employees on IT hardware, software and IT services.

Small and medium-sized entities around the world are increasingly interested in investing in infrastructure to improve employee productivity and better their competitive positions. SMB's will spread their investments around, focusing on three major components - hardware, software and IT services. These categories account for more than 85% of global expenditure for SMB technology.

At present hardware remains the largest expenditure, IDC expects 2019 to be the year in which software and IT services spending will surpass hardware.

Carlo Longhi, UK & Ireland Director and General Manager for Indirect Channels at Xerox, stated the SMB market is “highly significant” for the channel. “With over 80% of SMBs planning to improve their current workflow processes and the way in which they are managed, there’s a definite growth opportunity for vendors and their partners,” he claims. “It is an exciting time to be targeting SMBs – the opportunities are numerous, and are only likely to multiply as more and more businesses look to ready themselves for the future of work.”

While product expertise is essential for channel partners, Longhi says they also need to understand their customers’ business as a whole and identify where software solutions can be implemented to streamline processes if they want to make the most of the SMB opportunity.

Vendor support is “absolutely essential” for channel partners to build lasting, profitable customer relationships. It is important that vendors recognise how busy channel partners are and how often they might have dual-roles, with the same person handling everything from sales to service to social selling. “Vendors need to put themselves in partners’ shoes,” he suggests, “and consider how they can play to their strengths to deliver the best possible value to customers and prospects.”

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