Adoption of Industry-Specific Solutions Increasing in SMB Space, Says IDC

MILAN - 13 February 2007

Research based on an IDC survey focusing on the current and future adoption of IT solutions, small and medium-sized businesses (SMBs) are paying increasing attention to industry-specific solutions and 51% of them now have packaged software, in-house developments, or external developments in place. The new research also showed more interest from SMBs in supplementing current applications than in investing in new solutions.

The banking sector has the highest percentage of industry-specific applications, such as core banking or branch automation, with 69%. Adoption trends by country indicate that while Spanish (33.7%) and German SMBs (36.5%) prefer packaged applications, Italian SMBs prefer custom developed applications (26.3%), relying primarily on internal developments. Another interesting trend to emerge from the survey is the increase in the percentage of security investors in certain size classes. The survey shows that 81.5% of companies with 50–99 employees will invest in a security solution in 2007, increasing to 84.5% for companies with 100–249 employees.

The new research also revealed that the majority of SMBs will invest more in adding functionalities, integrating with other applications, or adding new modules to their IT solutions than in deploying new solutions from scratch. "SMBs will focus their 2007 investments on ERP, industry-specific applications, and CRM, adding new modules or undergoing custom functional modifications. The implementation of new solutions to replace old ones is more evident in the ERP area, especially among U.K. SMBs," said Nina Bonagura, a senior research analyst with IDC's European Vertical Markets and SMB research.

"SMBs need to move from a fragmented approach to security investments to a more integrated and viable security strategy that leverages investments already made in the past. Vendor support will be essential in this move," said Giuliana Folco, research vice president with IDC's European Vertical Markets and SMB research.

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