SMBs Plan to Spend More on Technology in 2023

SMBs Plan to Spend More on Technology in 2023

By Tracey E. Schelmetic

In an uncertain economic and labor climate, it can be difficult for technology solutions providers to predict their sales. Economic downturns can often lead to a drop-off in purchasing by enterprise customers looking to preserve cash for a rainy day. However, 2023 promises to be an unusual year: security concerns, in particular, are driving increased necessity for new technology purchases.

Capterra’s 2023 SMB Software Buying Trends Survey revealed that, despite fears of a looming recession, small and midsize businesses (SMBs) in the U.S. plan to spend more on software in 2023. In fact, three-quarters of American SMBs estimate they will spend more on software in 2023, compared to 2022.

Fear of cyber attacks is a major motivator and has promoted 55 percent of SMBs purchase IT architecture and security software in the past 12 months (the most of any software category). In addition, these same companies rate security as the top priority when purchasing other types of software. In fact, security (42 percent) beat out features (39 percent) and integration capabilities (38 percent) as the most important factor when looking for new software.

Still, implementation barriers remain for many companies when it comes to technology purchases. The top reason SMBs don’t invest in software is concern about downtime or a steep learning curve during implementation (45 percent), followed by ROI concerns (41 percent) and internal project team disagreements (36 percent). While some SMBs are taking a more cautious approach to software purchases, they may miss out on major long-term gains by avoiding short-term disruption.

In the past, many companies have indicated that they regret technology purchases. A majority (61 percent) of American SMBs say they have buyer’s remorse over a technology purchase in the past 12 to 18 months. Inadequate support services (39 percent) and higher-than-anticipated costs (34 percent) are the top reasons behind their regrets.

“A looming recession, increased borrowing costs, widespread purchase regret—these are all viable reasons for SMBs to decide to reduce their tech spend in the year ahead,” wrote Capterra analysts. “Instead, we find the opposite. A majority (56 percent) of surveyed SMBs anticipate they’ll spend anywhere from 10 to 20 percent more on technology in 2023, and 18 percent say they’ll spend even more than that. Only five percent plan to spend less than they did in 2022.”

While learning curves and potential downtime are valid concerns, they are also among the reasons companies are leaning increasingly on MSP partners, who have the talent and expertise to perform software installs and upgrades without impacting performance. 

Edited by Erik Linask
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MSPToday Contributor

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