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By Mark Henricks

More small businesses are pulling out their checkbooks with an eye to spending on IT than at any time since the last recession began in 2007, in a sign the technology economy may rebound during 2011 faster than expected not long ago. However, the outlook for staffing is not as positive, with a higher percentage of corporate IT decision makers saying they expect to cut IT staff in the next six months.

The CDW IT Monitor, a regular national poll of more than 1,000 IT decision makers conducted in November, found that almost half (49 percent) of small businesses anticipate replacing or installing new hardware in the next six months. At medium size businesses, 90 percent had the same expectation. The figures were up ten percentage points since the last survey in October 2010.

The software outlook was even rosier. Sixty-one percent of small business IT decision makers said they anticipate replacing or installing new software in the next six months. And overall, the index’s small business IT Growth Monitor, which measures IT investment expectations, hit its highest point since December 20007, rising five points from October to 54.   

Small and medium-sized businesses are helping to make up for cooling enthusiasm toward IT spending from the large business sector. Big businesses had been relatively more optimistic during the first part of 2010. Compared to October’s survey, for instance, a lower percentage of large businesses planned to buy new hardware and software, opposite to the small and medium-sized firms’ trend.

Still, overall, the results were positive. In the latest survey, 75 percent of all corporate IT decision makers anticipate replacing or installing hardware in the next six months.  Seventy-eight percent indicated they had similar plans for software. The results represented the highest level in the corporate sector since December 2007, when the first survey was taken.

Plans for adding IT staff are not as promising. Eight percent of corporate IT decision makers said they plan to reduce IT staff in the next six months. That number was up 3 percentage points since October 2010.

The results indicate that organizations are trying to improve productivity with new hardware and software purchases, while curbing human resource outlays, suggested Thomas E. Richards, president and COO of CDW. “Focusing on the IT refresh cycle and upgrading existing technology clearly is taking immediate precedence with decision makers over increasing IT staffing in the near term,” he said.

In another negative finding, government IT decision makers were less ready to spend than their private counterparts, and also less optimistic than they’d been all year, according to the survey.  The IT Growth Monitor for the federal government sector fell four points to 69, the lowest reading of 2010.

Comments (2)

	1. 01-07-2011 07:27
	It seems that the way out of the recession is still largely tied to the actions of small and medium business, although 2011 still seems to be a mixed bag of predictions. Perhaps a positive small business environment will encourage more displaced IT workers to become entrepreneurs. Registered

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	2. 01-07-2011 11:53
	The indicators are piling up to indicate a strong economic performance in 2011. Recovery has been slow in coming, but it's here now. Registered

Mark Henricks

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