Story image

A tale of two halves as NZ SMB IT spending passes $2.1 billion mark

01 May 2014

Small and medium business (SMB) spending in New Zealand grew by only 0.7% in 2013 to NZ$2.1 billion, according to a newly released report series from IDC.

In 2013, IDC saw an abrupt end to the SMB hardware spending boom, this being the main factor behind the lower than forecasted revenue.

But if hardware spending is excluded, the SMB market expanded by a more generous 3.5%.

"2013 was a tough year for providers who aimlessly targeted the SMB segment," says Louise Francis, Research Manager of IT Spending at IDC New Zealand.

"The key to success was precision engagement focused on 3rd platform technologies, particularly mobility and cloud computing.

"IDC has found most SMBs take an ad hoc approach to technology adoption, with no clear vision of how these technologies integrate with each other to provide business value.

"ITSPs and ICT advisors that are filling these gaps are the ones that have found the sweet spot in this segment."

Medium sized businesses (100-499 employees) are the star segment in New Zealand and IDC has established that this is where the biggest opportunities lie for vendors and service providers.

The following trends and traits have been identified by IDC in medium sized businesses, that highlight this opportunity;

• Medium-sized businesses are New Zealand's fastest growing IT spenders, experiencing a compound annual growth rate (CAGR) of 3.6%, through to 2017.

Key drivers of growth include outsourcing IT services and strong growth in application development software spending.

This segment has now reached a tipping point in terms of the adoption of 3rd platform technologies (cloud computing, mobility, big data and social business).

The segment's sophistication in terms of 3rd platform cloud technologies is now comparable to large enterprises.

• The biggest weakness with this rapid path to technological maturity is the chronic lack of internal IT capabilities and resources. This presents a substantial untapped opportunity for service providers to fill those gaps.

• Business drivers of IT spending change most frequently in medium sized businesses; three of the top five business concerns for medium-sized companies (market expansion, new segments, and higher profits) did not rank in the top five business concerns in 2012.

• This segment is a hotspot of growth opportunities for mobile enterprise management (MEM) solution providers over the forecasted period, with application mobilisation and mobile functionality the top ICT priority for twice as many medium-sized businesses compared with large enterprises.

Need the perfect flatmate? AI can help
A Kiwi entrepreneur has developed a flatmate-finding service called Mogeo, which is an algorithm that matches people to the perfect flatmates.
GoCardless to double A/NZ team by end of year
With a successful E round of investment and continuing organic growth globally, the debit network platform company aims to expand its local presence.
NZ’s Maori innovators are on the rise
“More iwi investors need to recognise that these sectors will provide the high-value jobs our children need."
Phone ringing? This biohack wants you to bite down and ChewIt
So your phone’s ringing, but instead of swiping right or pushing a Bluetooth button you bite down on a tiny piece of tech that sits in your mouth.
How big data can revolutionise NZ’s hospitals
Miya Precision is being used across 17 wards and the emergency department at Palmerston North Hospital.
Time's up, tax dodgers: Multinational tech firms may soon pay their dues
Multinational tech and digital services firms may no longer have a free tax pass to operate in New Zealand. 
Spark’s new IoT network reaches 98% of New Zealand
Spark is the first company to confirm the nationwide completion of a Cat-M1 network in New Zealand.
WhatsApp users warned to change voicemail PINs
Attackers are allegedly gaining access to users’ WhatsApp accounts by using the default voicemail PIN to access voice authentication codes.