In an ever-evolving and shifting digital landscape, understanding where SMBs are spending their money is critical to ensure the Channel capitalises on the significant opportunities ahead.
The past four years, in particular, has seen a huge change in how SMBs purchase and deploy IT services. The pandemic led to a technology eruption, as businesses had to think differently about how, and where, their employees were working.
But what is happening in today’s market? What trends are we seeing when it comes to SMBs? How, as the UK Channel, can we best serve those businesses?
At Giacom, we recently hosted a “Hunting for Growth” webinar with Karthik Pannala, principal analyst at Analysys Mason, who provided a detailed insight into Global and UK SMB spend.
Here’s what we learned from Karthik’s fascinating analysis.
‘SMBs are looking for a strategic partner, and are willing to switch to find one’
To set the landscape, there are currently around 1.53 million UK SMBs. Those SMBs spent a combined $63 billion on IT solutions in 2023.
Of that spend, just over a quarter – 26 per cent – was spent on IT and managed services, with 20 per cent spent on infrastructure.
UK SMB spend on Cloud services is expected to grow 9.6 per cent per year, up until 2028. That’s an annual increase from $29 billion to $45 billion.
We’re seeing clear themes and patterns when it comes to the motives behind those spends. SMBs are focused on enhancing their digital setups, locking down cyber security and integrating Cloud-based technologies.
SMBs are seeking increased productivity, streamlined operations and – above all – a competitive advantage in an increasingly digital business environment.
What’s even more interesting is those SMBs are looking for a strategic partner to support them on their growth journey, and they’re willing to switch Channel partner to achieve that. It’s up to us, as a Channel, to meet that need and play a key role in educating SMBs on the benefits of AI and other new technologies.
‘The Professional Services vertical market leads the way in IT spend’
Putting a vertical focus on the subject, the Professional Services vertical market is top of the pile when it comes to SMB spend in the UK. Those companies are hunting for efficient client management, project tracking and collaboration tools, and as a sector make up 21 per cent of total SMB spend.
Hot on those heels is the Manufacturing sector, which has seen a huge opportunity in IT to automate production, optimise supply chains and boost operational efficiency.
With more SMBs prioritising agility and digital initiatives, there is a big opportunity for MSPs. And the market is showing us MSPs are seizing that chance.
MSPs in the UK are gaining market share faster than the global average. By 2028, almost a third of UK SMB spend will be made with MSPs – up from 24 per cent in 2023.
MSPs are ahead of the curve, thanks to having core skills in cloud, an early adoption culture, Government backing, a robust and healthy tech sector and a range of collaborative efforts.
‘Technology is key to business continuity’
Today, SMBs are embracing advanced technology. They look at technology as an enabler of growth and winning new business.
SMBs are far more mature now, technologically, and are open to innovations like never before; the big one being … artificial intelligence.
AI-powered Global SMB IT spend in 2023 was a staggering $1.53 trillion, with AI spending growth estimated at 35 per cent every year.
It’s impossible to ignore AI. Take cyber security as an example. Many security solutions have AI features embedded into them, and they are increasingly influencing SMB decision-making.
When we talk to Channel partners, they are seeing managed security as an offering and AI as a conversation point - an opportunity to prepare SMBs for AI services in the future.
‘The opportunity is vast’
SMB spend is now returning to something resembling pre-pandemic growth levels, and most of that is expected to come from Cloud-based solutions.
It’s clear from what we have learned that, for MSPs, the opportunity is vast. And at Giacom, we can help our partners equip SMBs with the tools they need to thrive.
SMBs want their strategic partners to bring a clear vision and strategy to the table, along with a breadth and depth of product and solution expertise. MSPs can command a much more significant share of their customers’ wallets. From our own calculations, the average 50-user business spends around £180 a month, per person, on core ICT. That could span Cloud infrastructure, software and security, mobile, connectivity, hardware and so much more. That’s a huge opportunity and market for MSPs.
At Giacom, we want to enable our partners to grow and become a single source of IT services for their SMB customers. Only then do you become a true digital MSP.
In a Cloud-first world, we’re committed to empowering businesses with unparalleled channel support.
With Giacom championing your brand, and helping you attract new clients, we can bring true added value and help free up more time to invest in your business’ future.
Want to know more? Get in touch, call us on 03304 333 888.