Small Businesses Resist Pressure To Cut Technology

According to the latest CDW IT Monitor survey, increased numbers of small, medium and large companies expect to reduce tech spending and staffing in the next six months, but some cuts remain far less likely at small outfits.First the bad news from the latest bimonthly CDW IT Monitor: The data reveal that "One in five (19%) of corporate IT decision makers anticipate budget cuts in the first half of 2009an increase of 8 percentage points since October."

But the losses varied widely by customer size. Some 18% of large and midsize companies expect to trim IT budgets, 21% of small companies expect to do so.

The situation is somewhat reversed when it comes to staffing. Overall, 11% of companies expect to cut tech staff, while 19% say they will add workers. Among large companies (more than 1,000 employees) 29% expect to add staff, but 16% expect to shed workers (up from 7% in October). Midsize compaies (100 - 999 employees) are a bit more stable: only 10% of mid-size companies (100-999 employees) predict budget cuts (but that's up a lot from just 4% in October) while 22% are still planning to add IT staff. Look for fewer changes in small companies, where only 5% say they plan to cut IT staff (up from just 3% in October), and only 6% plan to add workers.

There's more bad news in the report. Overall IT marketplace confidence is at low ebb for the year, with the overall score falling 2 points to 70 since October. But again, the losses were not uniform across the board. Large companies saw the largest decline, falling 5 points to 74.

There is some good news in the report, though. a majority of large and mid-size businesses expecting to purchase new hardware (84 percent and 77 percent, respectively) and software (87 percent and 78 percent, respectively) over the next six months. But only 40% of small companies say they plan to buy new hardware while 55% say they'll purchase new software.

Sure, the trends don't look that great. But don't be fooled, people are still buying stuff. As CDW Vice President Mark Gambill put it: Despite market changes, many organizations continue to recognize the value of IT as a strategic investment. And some of those organizations are actually acting on that recognition.