Stable IT growth seen for 2005

Forrester forecast: Small and medium enterprises (SMEs) continue their reign as reseller top earners for this year. Bases: Forrester research on European IT budgets.

The Forrester report (2005 IT Spending Plans: European SMEs and IT Spending: European Enterprises) predicts an increase in the SME IT budget by 3.3% alongside an upward shot in enterprise budget by 2.9%. It also projects more than half of the budget to be allocated to IT headcount and hardware for SMEs, with the enterprise market exercising more restraint and spending on only a limited number of technologies. The report, bearer of good news, assures that SMEs will stay on course in their path of buying through resellers instead of direct from vendors.

Forrester analyst Manuel Angel Mendez says,

"Enterprises are generally more exposed to market forces. . . For the SME, the complexity of business process is increasing, and they are more driven by internal factors."

He goes on to add,

"Resellers really cater to most of the SME market, as SMEs become more reliant on them. . . The likes of Dell and Oracle are trying to get their resellers up to speed to target the SME sector and to get into those extra profit pockets."

On the other hand though, Peter Scargill, national IT chairman at the Federation of Small Businesses considers the figures to be a letdown.

"If you take interest rates into account then the SME figure is quite flat. I'm disappointed SMEs aren't spending more, but at least they aren't spending less."

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