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SMB Spending Flat In 2005: Report

A survey of decision-makers at small businesses (less than 250 employees) by JupiterMedia indicates that overall technology spending will be flat in 2005, with 44
A survey of decision-makers at small businesses (less than 250 employees) by JupiterMedia indicates that overall technology spending will be flat in 2005, with 44 percent of businesses budgeting less than $5,000 for technology purchases this year.

Still, certain segments of the market show some promise. In particular, businesses less than three years old will increase spending in the $5,000 to $24,999 range, said JupiterResearch senior analyst Joe Wilcox, who says that too many vendors treat all small businesses of the same size equally, when there are better ways to segment the marketplace. "My doctor's office and dry cleaner have the same number of employees, but they certainly don't buy or use the same technology and services," he said.

There are plenty of missed opportunities in the SMB marketplace, said Wilcox. For example, he said, there are 17.6 million non-payroll businesses in the United States, a number that represents 70 percent of the SMB market. "Vendors aren't sure whether to treat these as consumers, or businesses, or some kind of hybrid," he said.

In terms of purchasing intentions, SMBs are most interested in handheld devices and smartphones, as well as server and messaging software, Wilcox said. Messaging software in particular is under-penetrated when compared to the enterprise market: eleven percent of small businesses plan to purchase messaging software over the next twelve months. Among smaller businesses, those with under four employees, 12 percent plan to purchase new accounting software.

The study was the first from a new SMB Marketing Research Service launched by JupiterMedia today.