Small Guys Spend Big

One of the fastest growing markets in Canadian IT are small- and medium-sized businesses (SMBs), which account for an increasingly larger portion of IT spending. Although SMBs typically have a staff of fewer than 500, their buying power is vast. Research from IDC (Canada) Ltd. shows that SMBs represent 26 per cent of the country's total IT market, spending roughly $8.96 billion each year on hardware, software and IT services. When you consider that the entire Canadian IT market is worth about $35 billion, it's an unusually large sum.

That figure is expected to grow at a steady 3.4 per cent compound annual growth rate over the next five years. In comparison, the CAGR of the outside market is only 2.5 per cent. More and more, spending is centering on services. SMBs are seeking outsourced business services, such as Web site hosting, to increase sales efficiency and boost the bottom line. Web site hosting is by far the most commonly used service - nearly half of all SMBs are currently outsourcing their hosting needs.

Canada's relatively strong fiscal health, coupled with low inflation and interest rates, is allowing for this growth rate and spending on products and services. About one million incorporated companies form the marketplace of this country, and 75 per cent of them have less than five employees. What's more, SMBs represent about 45 per cent of our Canadian economy.