Microsoft on March 25 released results of a study of the business challenges and technology priorities that small and midsize businesses are facing in the year ahead. The first “Microsoft SMB Insight Report,” which the company says will be published annually, identified virtualization, IT consolidation, business intelligence, software as a service and support of remote workers as the top technology investment priorities for SMBs in 2009.

The results were drawn from a five-country survey of more than 600 Microsoft Small Business Specialists. The company found that the major concerns driving SMB technology investments are declining revenue, competition from larger businesses and general economic difficulties. In response, many SMBs are focusing on IT investments that directly benefit their bottom line—either by reducing operating costs, improving employee productivity, or acquiring and retaining customers. 

Eduardo Rosini, corporate vice president for the Worldwide Small and Midmarket Solutions and Partners group at Microsoft, says SMBs play a critical role in the world’s economy, and are often the first to emerge from periods of economic uncertainty because of their "passion, resiliency and innovation."

The survey found that 50 percent of the surveyed Small Business Specialists identified virtualization or IT consolidation through a small or midsize server as the technology most likely to reduce operating costs. Microsoft says it expect a 20 percent increase this year in the number of SMBs that use SAAS.

When it comes to green IT spending, only about one-third of Small Business Specialists anticipate SMBs will spend more on green IT investment in 2009. More bread-and-butter expenditures such as IT consolidation, virtualization and mobile solutions are expected to take precedent in 2009.

Nearly 40 percent expect an increased interest in business intelligence and identified it as a critical tool for helping improve a customer’s experience and increase loyalty, and more than half of the surveyed Small Business Specialists anticipate an increase in the number of SMB remote workers. Nearly 60 percent expect that the shift to more remote workers also will lead to bigger roles and more responsibilities for those individuals working remotely.

The survey indicated growth of 20 percent in SMB customers’ use of SAAS in 2009, from 66 percent in early 2009 to 86 percent by the end of the year. Security was considered a top priority, with demand being greatest for IT security policy enforcement and secure data storage.

In order to reduce costs, the report found SMBs are reducing staff (67 percent), reducing IT costs (64 percent) and reducing travel (34 percent), while looking to IT investment in order to lower costs and streamline operations—40 percent of SMBs worldwide indicate an intention to leverage technology to reduce costs or make processes more efficient and improve employee productivity in the next three months.

“Historically, we have seen that SMBs have responded to economic contractions by intensifying their use of IT, both to cut costs and to defend and enhance their customer relationships,” said AMI-Partners managing director Steve Reynolds. “If SMBs respond to the current crisis as they have in the past, we can expect that a sizable number of smaller businesses will invest in IT now to lower operating costs, boost employee productivity and increase connectedness to customers so as to reap the benefits in the years ahead.”