IT budgets and hiring rise to highest levels in 18 months

The study, conducted by the IT professionals' social business network firm, Spiceworks, among of 3,000 SMEs in January and February, also appears to show a jump in cloud services usage and planned virtualisation adoption. It reveals that IT budgets for 2011 have grown 8% compared with the second half of 2010 – the largest increase in more than 18 months. The average annual IT budget for SMEs now stands at $132,000. Additionally, nearly one in three SMEs (31%) plan to recruit IT staff – also the largest increase in the past 18 months – with smaller companies with sub-20 employees the most confident (33%), compared to 17% of companies with more than 20. "Small businesses are responsible for half of all IT spending," comments Jay Hallberg, co-founder and vice president of marketing for Spiceworks. "All signs point to a good year for the IT industry as SMEs around the world significantly boost investments in technology products and services as well as staffing," he adds. As for cloud computing, the technologies and services are now being used by 28% of SMEs, marking a 100% jump since mid-year 2010. Indeed, Spiceworks believes that by mid-2011, cloud usage among SMEs will rise to 42%. Incidentally, just over a quarter (26%) of SME IT budgets are now earmarked for hosted and cloud services – up from 19% reported this time last year and representing a 37% year-on-year increase. The picture of advanced It is even more convincing when it comes to virtualisation, with 54% of SMEs currently using the technologies and another 20% planning to do so by mid-year. "The hesitation many small businesses previously had toward virtualisation and cloud services appears to have dissipated," observes Hallberg.