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Western European SMBs to spend USD 125 bln on IT in 2017

IT spending for the SMB market in Western Europe is expected to reach $125.3 billion in 2017, with growth of 3.4% over 2016

According to a new study from International Data Corporation (IDC), IT spending will exceed $137 million by 2021, generating a 2.5% CAGR over the 2016-2021 forecast period. In Western Europe, IT spending by the SMB market represents a third of total spending. SMBs are the heart of the Western European economic structure, accounting for more than 99% of the business population and more than two-thirds of total employment.

SMBs are spread across all vertical markets and are characterized by high heterogeneity, both in the structure and in their contributions across the region in terms of value-added and employment creation. SMBs are more concentrated on services in terms of number of companies, and according to a recent OECD publication (Small, Medium, Strong. Trends in SME Performance and Business Conditions, 2017), their value-added and employment contribution is higher in distribution and professional services than in manufacturing.

‘SMBs show resilience and a propensity to invest,’ said Carla La Croce, research analyst, IDC European Industry Solutions, Customer Insight, and Analysis. ‘Conditions have improved for SMBs, as there have been improvements in access to markets, thanks to an enhanced physical and ICT infrastructure, reforms in regulations, and easier access to information and finance. The digital transformation [DX] journey posed challenges to SMBs, which were more reluctant in the past to abandon traditional solutions. Cloud, Big Data and analytics, and the Internet of Things [IoT], combined with artificial intelligence [AI] and cognitive systems, are unavoidable technologies that are essential to tackle everyday business challenges.’

Within IDC’s SMB research, the number of employees that work for an organization in a country determines company size. IDC defines SMBs in Western Europe as companies and organizations with fewer than 500 employees. Companies are classified into different groups according to their business size, based on the number of employees by country. IT spending forecasts are segmented into IDC’s 19 standard vertical markets: banking, insurance, securities and investment services, discrete manufacturing, process manufacturing, retail, wholesale, professional services, personal and consumer services, healthcare provider, transportation, telecommunications, media, utilities, construction, resource industries, federal/central government, state/local government, and education.

This IDC forecast is based on IDC’s Worldwide Semiannual Small and Medium Business Spending Guide, which provides guidance on the expected technology opportunity around this market at a regional and total worldwide level. It provides detail on small and midsize business IT spending across 40 technology categories in 53 countries. SMB size categories include 1-9 employees, 10-99 employees (total small business), 100-499 employees, and 500-999 employees (total midsize businesses).

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