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  • 1 | P a g e

    Microsoft SMB IT & Hosted IT Index, January 2010

    Technology as an Enabler for Growth:

    How Small and Medium Businesses Use Hosted

    Services to Improve Business Performance

    Microsoft SMB IT & Hosted IT Index

    Summary of Results

    11th

    February 2010

  • 2 | P a g e

    Microsoft SMB IT & Hosted IT Index, January 2010

    Project Background and Methodology

    In January 2010, Microsoft undertook research of small and medium businesses attitudes and

    awareness to IT. The research also showed how the economic downturn had affected their business

    performance and gauged their awareness of hosted services in light of the business advantages that

    they can deliver.

    Data was gathered across a total of 15 countries. The focus was on small and medium sized

    businesses from 10 to 500 employees. A cross section of private sector industries was represented.

    3,193 business or IT decision makers (in small businesses usually the same person) were surveyed.

    The countries included were:

    • EMEA (UK, France, Germany, the Netherlands, Norway, Poland, South Africa, Spain) • Asia (Australia, China, India, Japan, Singapore, South Korea) • USA

    The methodology used was online research inviting opted-in, appropriately qualified individuals (the

    IT decision maker) from relevant organisations. In addition, there were screening questions used to

    ensure this selection process was applied. These included ensuring sole traders and people from

    organisations with more than 500 employees were not invited, as well as a function question so if a

    respondent was just a user of IT rather than a decision maker, they were also discounted.

    Contents Introduction ........................................................................................................................................ 2

    Gauging the importance of IT in running a small and medium business ........................................... 3

    Small and Medium Business revenue performance during the global economic recession .............. 4

    Does IT deliver a business advantage? ............................................................................................... 6

    IT use amongst small and medium businesses ................................................................................... 6

    How do small and medium businesses source and support IT? ......................................................... 7

    The outlook for SMB use of future technologies .............................................................................. 13

    Conclusions ....................................................................................................................................... 14

    Introduction Microsoft’s motivation for conducting extensive research into the attitudes and awareness of small

    and medium businesses worldwide was to gauge what their priorities are, how they have been

    affected by the global economic downturn and what they need to be able to capitalise on an upturn

    in business fortune. The research reported some expected and some unexpected results, such as a

    surprisingly high revenue increase among SMBs over the last 12 months, though a large number of

    businesses have seen revenues decrease dramatically. Even here though, there is ambition to

    compete more effectively with big businesses and our findings show how SMBs are tackling that,

    with many recognising that IT is an enabler for better business productivity and effectiveness.

    This research report looks at the results and findings of the importance of IT to SMBs, revenue

    performance during the recession and how this may correlate to IT, what IT tools and services SMBs

    use, what they host or have on premise, and how progressive they are in terms of using the latest

    technologies.

    Additional analysis and graphs throughout this report are courtesy of Freeform Dynamics.

  • 3 | P a g e

    Microsoft SMB

    Gauging the importance of The organisations

    interviewed for the survey

    across the world exhibit a

    very high reliance on IT to

    help the day to day running

    of their business with 86%

    saying that technology is

    either very important or

    critical to their business.

    There is clear evidence from

    the research that for these

    organisations at least,

    technology is extremely

    important to the Small and

    Medium Business

    community.

    Norway and Japan have the lowest percentage

    UK and China have the highest at 97% and 96% respectively.

    that IT is critical to the day to day running of business, and this proportion is 20% greater in UK and

    China. The nations most likely to report that IT complements business but is not essential, are the

    Netherlands, Norway and Poland. However, the proportion of respondents in these nations to

    this assertion is still less than 10%.

    services are most likely to report that IT is critical to their business.

    How Important is IT to the day to day running of your business?(regional responses) Critical (4)

    Very important (3)

    Moderately important (2)

    Not important (1)

    Average

    How Important is IT to the day to day running of your business?(regional responses)

    To

    tal

    Fin

    an

    cial

    serv

    ices

    Critical (4) 55.5 %

    65.2

    %

    Very important (3) 30.4 %

    25.6

    %

    Moderately important (2)

    10.7

    %

    8.0

    %

    Not important (1) 3.4 %

    1.3

    %

    Average 3.4 3.5

    Microsoft SMB IT & Hosted IT Index, January 2010

    Gauging the importance of IT in running a small and medium business

    Norway and Japan have the lowest percentage of heavily IT-reliant organisations

    UK and China have the highest at 97% and 96% respectively. More than half of respondents reported

    that IT is critical to the day to day running of business, and this proportion is 20% greater in UK and

    The nations most likely to report that IT complements business but is not essential, are the

    Netherlands, Norway and Poland. However, the proportion of respondents in these nations to

    is still less than 10%. Respondents in computer services or telecoms

    services are most likely to report that IT is critical to their business.

    How Important is IT to the day to day running of your business?(regional

    Total EMEA Asia

    55.5 % 56.1 % 55.1 %30.4 % 29.5 % 31.4 %10.7 % 10.8 % 11.0 %3.4 % 3.7 % 2.5 %

    3.4 3.4 3.4

    Fin

    an

    cial

    Ma

    n. o

    r en

    g.

    RD

    T

    Bu

    s. & p

    rof.

    serv

    ices

    Co

    mp

    ute

    r

    serv

    ices o

    r

    tele

    com

    s

    Tra

    ve

    l, leisu

    re,

    en

    terta

    inm

    en

    t

    Pro

    p.

    con

    structio

    n

    or m

    inin

    g

    65.2

    %

    55.5

    %

    46.0

    %

    57.4

    %

    74.1

    %

    48.0

    % 46.8 %

    25.6

    %

    30.8

    %

    37.2

    %

    32.8

    %

    20.2

    %

    31.0

    % 34.3 %

    8.0

    %

    11.6

    %

    11.8

    %

    7.7

    % 4.9 %

    15.7

    % 12.5 %

    1.3

    %

    2.1

    %

    5.0

    %

    2.1

    % 0.8 %

    5.2

    % 6.4 %

    3.5 3.4 3.2 3.5 3.7 3.2 3.2

    small and medium business

    reliant organisations at 71% while the

    More than half of respondents reported

    that IT is critical to the day to day running of business, and this proportion is 20% greater in UK and

    The nations most likely to report that IT complements business but is not essential, are the

    Netherlands, Norway and Poland. However, the proportion of respondents in these nations to make

    r services or telecoms or in financial

    Asia USA

    55.1 % 52.8 %

    31.4 % 33.6 %

    11.0 % 8.8 %

    2.5 % 4.8 %

    3.4 3.3

    Co

    nsu

    me

    r

    serv

    ices

    Ch

    em

    ical o

    r

    ph

    arm

    ace

    utica

    l Othe

    r

    Co

    mm

    ercia

    l

    42.9

    %

    55.8

    %

    38.6

    %

    41.0

    %

    29.5

    %

    26.9

    %

    12.8

    %

    11.6

    %

    23.4

    %

    3.2 % 3.2

    %

    11.1

    %

    3.2 3.4 2.9

  • 4 | P a g e

    Microsoft SMB

    Small and Medium Business revenue performance during the global

    economic recession SMBs have reason to feel optimistic: t

    increases for SMBs around the world, though some were obviously affected negatively and

    dramatically. 2010 will give SMB

    look carefully at what will enable them to be more productive and to compete more effectively.

    over half of the IT-reliant organisations

    around one in seven suggesting their revenues had decreased. Great

    country, region, size and sector is given below.

    region are most likely to report an increased revenue (even

    revenues). USA however is the region where the largest proportion of decreased revenues was

    reported.

    The largest proportions of respondents to report an increased revenue work in the chemical or

    pharmaceutical sector, and in financial services.

    property, construction or mining sector reported a decreased revenue.

    respondents to report an increased revenue were in the largest of the organisations

    the lowest proportion to do so, and the highest to report a decreased revenue were in the smallest

    of organisations.

    Over 90% of the respondents to report an increased revenue, reported it to be by less than 50%.

    This is consistent across all the countries, the three regions, the various sizes and all the sectors

    apart from chemical and pharmaceutical

    might have anticipated, the average increase is not huge for these organisations but

    suggest that for an appreciable percentage of small and medium companies, the last 12 months

    have not been a total disaster. Given the high proportion of IT

    will be interesting to examine the role IT has pla

    If we look at the two indicators together

    performance), we see there is a correlation between them, though we have to be careful about

    Microsoft SMB IT & Hosted IT Index, January 2010

    Small and Medium Business revenue performance during the global

    s have reason to feel optimistic: the worldwide view shows that 2009 did deliver some revenue

    increases for SMBs around the world, though some were obviously affected negatively and

    SMBs more opportunity but to capitalise on an upturn

    at what will enable them to be more productive and to compete more effectively.

    reliant organisations researched saw their revenues increase in the last year with

    around one in seven suggesting their revenues had decreased. Greater examination of variance by

    country, region, size and sector is given below.

    The countries where

    organisations are most

    likely to have increased

    revenues in the last year

    are China, India and

    Germany. Meanwhile,

    Japan is the country

    where the smallest

    proportion of

    organisations reported an

    increased revenue and

    almost half reported

    decreased revenues,

    followed by the UK where

    over a quarter reported

    decreased revenues.

    Respondents in the

    region are most likely to report an increased revenue (even with Japan's incidence of decreased

    USA however is the region where the largest proportion of decreased revenues was

    The largest proportions of respondents to report an increased revenue work in the chemical or

    and in financial services. In contrast, almost a fifth of respondents in the

    property, construction or mining sector reported a decreased revenue. The highest proportion of

    respondents to report an increased revenue were in the largest of the organisations

    the lowest proportion to do so, and the highest to report a decreased revenue were in the smallest

    Over 90% of the respondents to report an increased revenue, reported it to be by less than 50%.

    s all the countries, the three regions, the various sizes and all the sectors

    pharmaceutical where the proportion is 86%.This suggests that, as we

    might have anticipated, the average increase is not huge for these organisations but

    suggest that for an appreciable percentage of small and medium companies, the last 12 months

    have not been a total disaster. Given the high proportion of IT-reliant companies in the sample, it

    will be interesting to examine the role IT has played in giving us such an optimistic picture.

    If we look at the two indicators together (the role of IT within the business and the

    , we see there is a correlation between them, though we have to be careful about

    Small and Medium Business revenue performance during the global

    he worldwide view shows that 2009 did deliver some revenue

    increases for SMBs around the world, though some were obviously affected negatively and

    s more opportunity but to capitalise on an upturn SMBs need to

    at what will enable them to be more productive and to compete more effectively. Just

    saw their revenues increase in the last year with

    er examination of variance by

    The countries where

    organisations are most

    likely to have increased

    revenues in the last year

    are China, India and

    Germany. Meanwhile,

    Japan is the country

    where the smallest

    proportion of

    organisations reported an

    increased revenue and

    almost half reported

    decreased revenues,

    followed by the UK where

    over a quarter reported

    decreased revenues.

    Respondents in the Asia

    with Japan's incidence of decreased

    USA however is the region where the largest proportion of decreased revenues was

    The largest proportions of respondents to report an increased revenue work in the chemical or

    In contrast, almost a fifth of respondents in the

    The highest proportion of

    respondents to report an increased revenue were in the largest of the organisations. Alternatively,

    the lowest proportion to do so, and the highest to report a decreased revenue were in the smallest

    Over 90% of the respondents to report an increased revenue, reported it to be by less than 50%.

    s all the countries, the three regions, the various sizes and all the sectors

    where the proportion is 86%.This suggests that, as we

    might have anticipated, the average increase is not huge for these organisations but does perhaps

    suggest that for an appreciable percentage of small and medium companies, the last 12 months

    reliant companies in the sample, it

    yed in giving us such an optimistic picture.

    the revenue

    , we see there is a correlation between them, though we have to be careful about

  • 5 | P a g e

    Microsoft SMB

    cause and effect here, as two factors are likely to be underpinning this picture. Firstly, fast growing

    organisations have a greater need for IT (and possibly more money to spend on it). Secondly, IT in

    itself encourages more growth as a result of the enhanced efficiency and ef

    Either way, it is an important observation that technology use and business performance are related,

    which could be a call to action for those not taking IT that seriously.

    Chart source: Freeform Dynamics

    Could it be that IT is not as relevant to some types of company though

    Chart source: Freeform Dynamics

    The argument that ‘IT is not that relevant to us’ seem

    attitudes and levels of use within each industry

    between IT use and growth is seen within individual industries themselves

    Microsoft SMB IT & Hosted IT Index, January 2010

    as two factors are likely to be underpinning this picture. Firstly, fast growing

    organisations have a greater need for IT (and possibly more money to spend on it). Secondly, IT in

    itself encourages more growth as a result of the enhanced efficiency and effectiveness it enables.

    Either way, it is an important observation that technology use and business performance are related,

    which could be a call to action for those not taking IT that seriously.

    s not as relevant to some types of company though?

    The argument that ‘IT is not that relevant to us’ seems to be invalid. There are examples of all

    attitudes and levels of use within each industry and within each size sector of SMB.

    between IT use and growth is seen within individual industries themselves. In terms of size of

    as two factors are likely to be underpinning this picture. Firstly, fast growing

    organisations have a greater need for IT (and possibly more money to spend on it). Secondly, IT in

    fectiveness it enables.

    Either way, it is an important observation that technology use and business performance are related,

    to be invalid. There are examples of all

    r of SMB. The correlation

    . In terms of size of

  • 6 | P a g e

    Microsoft SMB

    company, an increased focus on IT correlates with good performance to one degree or another in all

    of the size categories included, tho

    500 employee) segment. Taken overall, however, this corroborates the notion that IT can provide

    tangible business advantage, even for smaller companies. The bottom line is that the link betwee

    and performance is observed for all types of company.

    Does IT deliver a business advantage?Overall, at least 9 in 10 respondents reported that larger companies had an advantage over smaller

    competitors because of their dedicated and sophisticated IT

    sector alone (up to 50 employees) where one may not consider IT to be as vital, this figure has still

    grown from 79%, when similar research was conducted in 2008, to 85% of businesses in 2010. This

    shows that the importance of IT is growing each year. It also gives us the obvious viewpoint that if

    dedicated IT resources were available to the smallest organisations, then this differentiator would be

    eroded.

    Overall, around four-fifths of respondents thought the

    more IT available regardless of cost. However, the economic downturn stopped IT investment

    among one in three SMBs worldwide. This leaves

    more productive and effective but cannot afford to risk high investments.

    that if they cannot afford to own various IT tools then they cannot afford to have them at all. Just as

    in any other walk of life, renting could be the best course of action. This repor

    discuss the specific attitudes and awareness to hosted services.

    IT use amongst small and medium businessesOverall, some 83.4% of respondents said that professional looking communications were either

    ‘critical’ or ‘very important’. For

    at 61%. Spain and China are especially keen to promote a professional front

    important or critical. From looking at the importance averages, three nations believe pro

    tools to be slightly less than very important, being the Netherlands, Japan and South Korea. But this

    is only a comparative score and even for those three countries, taking each score in isolation

    suggests a very high understanding of the rol

    of the organisation.

    In terms of the IT used by the respondents, email

    followed by back-up tools (92.4%).

    Microsoft SMB IT & Hosted IT Index, January 2010

    n increased focus on IT correlates with good performance to one degree or another in all

    of the size categories included, though the relationship is most marked in the medium sized (200 to

    500 employee) segment. Taken overall, however, this corroborates the notion that IT can provide

    tangible business advantage, even for smaller companies. The bottom line is that the link betwee

    and performance is observed for all types of company.

    Does IT deliver a business advantage? Overall, at least 9 in 10 respondents reported that larger companies had an advantage over smaller

    competitors because of their dedicated and sophisticated IT resources. In fact, in the small business

    sector alone (up to 50 employees) where one may not consider IT to be as vital, this figure has still

    grown from 79%, when similar research was conducted in 2008, to 85% of businesses in 2010. This

    importance of IT is growing each year. It also gives us the obvious viewpoint that if

    dedicated IT resources were available to the smallest organisations, then this differentiator would be

    fifths of respondents thought their business would be better off it they had

    more IT available regardless of cost. However, the economic downturn stopped IT investment

    s worldwide. This leaves SMBs in a position where they know they could be

    tive but cannot afford to risk high investments. Most SMB

    that if they cannot afford to own various IT tools then they cannot afford to have them at all. Just as

    in any other walk of life, renting could be the best course of action. This report will come on to

    discuss the specific attitudes and awareness to hosted services.

    use amongst small and medium businesses of respondents said that professional looking communications were either

    ‘critical’ or ‘very important’. For the small businesses surveyed in 2008, this figure was much lower

    . Spain and China are especially keen to promote a professional front, over 94%

    From looking at the importance averages, three nations believe pro

    tools to be slightly less than very important, being the Netherlands, Japan and South Korea. But this

    is only a comparative score and even for those three countries, taking each score in isolation

    suggests a very high understanding of the role professional IT tools can play in the successful running

    In terms of the IT used by the respondents, email is the most pervasive IT tool worldwide (95.6%),

    up tools (92.4%). However, this does not mean that these tools are used by every

    n increased focus on IT correlates with good performance to one degree or another in all

    ugh the relationship is most marked in the medium sized (200 to

    500 employee) segment. Taken overall, however, this corroborates the notion that IT can provide

    tangible business advantage, even for smaller companies. The bottom line is that the link between IT

    Overall, at least 9 in 10 respondents reported that larger companies had an advantage over smaller

    resources. In fact, in the small business

    sector alone (up to 50 employees) where one may not consider IT to be as vital, this figure has still

    grown from 79%, when similar research was conducted in 2008, to 85% of businesses in 2010. This

    importance of IT is growing each year. It also gives us the obvious viewpoint that if

    dedicated IT resources were available to the smallest organisations, then this differentiator would be

    ir business would be better off it they had

    more IT available regardless of cost. However, the economic downturn stopped IT investment

    s in a position where they know they could be

    SMBs may believe

    that if they cannot afford to own various IT tools then they cannot afford to have them at all. Just as

    t will come on to

    of respondents said that professional looking communications were either

    the small businesses surveyed in 2008, this figure was much lower

    over 94% say it is very

    From looking at the importance averages, three nations believe professional IT

    tools to be slightly less than very important, being the Netherlands, Japan and South Korea. But this

    is only a comparative score and even for those three countries, taking each score in isolation

    e professional IT tools can play in the successful running

    worldwide (95.6%),

    tools are used by every

  • 7 | P a g e

    Microsoft SMB

    company worldwide and indeed the research shows that

    7% of financial services companies worldwide do not have any back

    companies are the least likely to have website

    companies in the UK are the most likely to have a website, just 3.5% do not have one.

    The below chart shows which technologies people have (hosted or on premise), giving a gauge of the

    sophistication of IT worldwide.

    How do small and medium businessesOverall, around four in ten respondents reported they have the necessary skills to handle their IT

    systems, but over half of the respondents in the USA and even more so in UK believed

    capable. In contrast, the lowest proportion of respondents to report this were in Poland, South

    Africa and South Korea where only around a third believed they were capable.

    respondent function at this stage. Within the smalle

    senior decision maker whereas in the other organisations, we would be aiming for the IT decision

    maker. If IT is important to the smallest company, then it is likely that our respondent will have an IT

    familiarity at the least. Of course, when researching the IT decision

    companies, the vast majority will be IT professionals.

    The most common source of IT software is a local IT provider, reported by almost three in ten

    respondents. Over a fifth of respondents in China reported they use an IT hosting provider, making

    them the most likely to do so.

    Microsoft SMB IT & Hosted IT Index, January 2010

    company worldwide and indeed the research shows that even in a heavily regulated industry, over

    7% of financial services companies worldwide do not have any back-up tools. South African

    companies are the least likely to have websites (28.8% compared to a global average of 11.8%),

    companies in the UK are the most likely to have a website, just 3.5% do not have one.

    The below chart shows which technologies people have (hosted or on premise), giving a gauge of the

    How do small and medium businesses source and support ITOverall, around four in ten respondents reported they have the necessary skills to handle their IT

    systems, but over half of the respondents in the USA and even more so in UK believed

    In contrast, the lowest proportion of respondents to report this were in Poland, South

    Africa and South Korea where only around a third believed they were capable. We must consider the

    respondent function at this stage. Within the smallest company, this would be an owner/manager or

    senior decision maker whereas in the other organisations, we would be aiming for the IT decision

    maker. If IT is important to the smallest company, then it is likely that our respondent will have an IT

    rity at the least. Of course, when researching the IT decision-maker in the non

    companies, the vast majority will be IT professionals.

    The most common source of IT software is a local IT provider, reported by almost three in ten

    er a fifth of respondents in China reported they use an IT hosting provider, making

    even in a heavily regulated industry, over

    up tools. South African

    s (28.8% compared to a global average of 11.8%),

    companies in the UK are the most likely to have a website, just 3.5% do not have one.

    The below chart shows which technologies people have (hosted or on premise), giving a gauge of the

    IT? Overall, around four in ten respondents reported they have the necessary skills to handle their IT

    systems, but over half of the respondents in the USA and even more so in UK believed they were

    In contrast, the lowest proportion of respondents to report this were in Poland, South

    We must consider the

    st company, this would be an owner/manager or

    senior decision maker whereas in the other organisations, we would be aiming for the IT decision

    maker. If IT is important to the smallest company, then it is likely that our respondent will have an IT

    maker in the non-smallest

    The most common source of IT software is a local IT provider, reported by almost three in ten

    er a fifth of respondents in China reported they use an IT hosting provider, making

  • 8 | P a g e

    Microsoft SMB IT & Hosted IT Index, January 2010

    Where do you get IT support for your business?

    Total

    I have the necessary skills to maintain the system and deal with problems

    42.7 %

    I use an IT services/support company when required

    32.4 %

    I have a contract with an IT services/support company that maintains our systems

    24.4 %

    The PC retailer provides IT support when required

    19.3 %

    I employ an IT professional(s) 19.0 %

    A friend helps when I have a problem

    15.0 %

    Someone within my business has the IT skills required, but it’s not their main job

    14.2 %

    I use an IT Hosting provider 7.7 %

    Where do you primarily buy IT software?

    Total

    From a local IT provider 28.7 %

    From a national retailer 24.1 %

    Specialist online computer stores 13.7 %

    I have a consultant that takes care of all of my IT needs

    10.7 %

    From a network service provider/telecoms operator

    9.5 %

    Through a friend 4.2 % Big-brand online retailers (Amazon)

    4.2 %

    From my IT hosting provider 4.9 %

    The local or national retailer is very important in this context as is the online merchant, but it’s much

    less important than it appeared in

    2008: 66.5% of SMBs buy from

    one of these in 2010 compared to

    around 89% in 2008.

    Buying primarily from an IT

    hosting supplier is still fairly low

    but SMBs are becoming

    increasingly aware of this option.

    Awareness of hosted services is

    increasing with 65 percent of

    SMBs using hosted software to some extent, while 73 percent of the remainder have considered it,

    compared with only 44 percent in the 2008 Index.

  • 9 | P a g e

    Microsoft SMB

    Of those respondents that are not

    below shows those that are using hosted software.

    Of those respondents using

    hosted services, it is the

    business advantage that

    attracted them: almost 36%

    wanted to find ways to

    improve business productivity;

    31% didn’t have the resources

    to manage their IT; cost was

    much lower at 25%.

    Companies in China show their

    ambition because 54% use

    hosted services because

    thought it would help them

    compete with bigger

    companies who have better IT.

    Of those respondents that have considered hosting, but are not using it, the economic downturn

    stopping investment (33.9%) and a lack of aware

    being able to undertake it.

    Microsoft SMB IT & Hosted IT Index, January 2010

    Of those respondents that are not using hosted software, 72.5% have considered hosting.

    below shows those that are using hosted software.

    Of those respondents that have considered hosting, but are not using it, the economic downturn

    stopping investment (33.9%) and a lack of awareness (25.2%) were the two top reasons for not

    software, 72.5% have considered hosting. Chart

    Of those respondents that have considered hosting, but are not using it, the economic downturn

    ness (25.2%) were the two top reasons for not

  • 10 | P a g e

    Microsoft SMB

    In terms of opportunities for

    hosting providers, three in

    four (75.7%) of respondents

    have considered using

    hosting to IT tools that they

    do not currently have.

    Respondents in China are the

    most likely to have

    considered using hosted

    services for four different IT

    tools: backup,

    filesharing/collaboration, e-

    commerce and CRM. The

    chart shown is in response to

    the question: Have you considered using hosted IT services for any of th

    When the research results for hosting drivers are correlated against how SMBs feel about the

    importance of IT, the results are

    emphasised as a driver for hosted servic

    heavily to support their business)

    competitiveness. At the other end of the spectrum, however, the least progressive organisations

    tend to be more focused on reducing cost and the IT burden, with less emphasis on value.

    Microsoft SMB IT & Hosted IT Index, January 2010

    the question: Have you considered using hosted IT services for any of the following IT tools?

    When the research results for hosting drivers are correlated against how SMBs feel about the

    importance of IT, the results are very revealing in that access to new or advanced functionality is

    emphasised as a driver for hosted services among progressive organisations (ie those that use IT

    heavily to support their business) who clearly care a lot about business value, productivity and

    competitiveness. At the other end of the spectrum, however, the least progressive organisations

    o be more focused on reducing cost and the IT burden, with less emphasis on value.

    e following IT tools?

    When the research results for hosting drivers are correlated against how SMBs feel about the

    very revealing in that access to new or advanced functionality is

    (ie those that use IT

    who clearly care a lot about business value, productivity and

    competitiveness. At the other end of the spectrum, however, the least progressive organisations

    o be more focused on reducing cost and the IT burden, with less emphasis on value.

  • 11 | P a g e

    Microsoft SMB

    Chart source: Freeform Dynamics

    Microsoft SMB IT & Hosted IT Index, January 2010

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    Microsoft SMB

    Looking more closely at the IT tools used by the SMBs surveyed,

    pervasive worldwide (95.6%), followed

    regulated industry, over 7% of financial services companies worldwide do not have any back

    tools. South African companies are the least likely to have websites (28.8% compared to a global

    average of 11.8%), companies in the UK are the most likely to have a website, just 3.5% do not have

    one. The below chart shows which technologies people have (hosted or on premise), giving a gauge

    of the sophistication of IT worldwide.

    The following charts break out the different services that are either hosted or on premise.

    Chart source: Freeform Dynamics

    Microsoft SMB IT & Hosted IT Index, January 2010

    Looking more closely at the IT tools used by the SMBs surveyed, IT tools such as

    pervasive worldwide (95.6%), followed by back-up tools (92.4%). Although even in a heavily

    regulated industry, over 7% of financial services companies worldwide do not have any back

    tools. South African companies are the least likely to have websites (28.8% compared to a global

    1.8%), companies in the UK are the most likely to have a website, just 3.5% do not have

    The below chart shows which technologies people have (hosted or on premise), giving a gauge

    of the sophistication of IT worldwide.

    t the different services that are either hosted or on premise.

    such as email are almost

    up tools (92.4%). Although even in a heavily

    regulated industry, over 7% of financial services companies worldwide do not have any back-up

    tools. South African companies are the least likely to have websites (28.8% compared to a global

    1.8%), companies in the UK are the most likely to have a website, just 3.5% do not have

    The below chart shows which technologies people have (hosted or on premise), giving a gauge

    t the different services that are either hosted or on premise.

  • 13 | P a g e

    Microsoft SMB

    The services we see here are far more concerned with business differentiation from an effectiveness

    point of view, i.e. they provide enhanced end user capab

    within the business to work. The relationship between the emphasis on IT and such capability,

    whether delivered hosted or on-

    these areas being tangible enablers of business value, and as hosted solutions lower the barrier to

    entry, it’s here that we see some of the greatest opportunities for business improvement.

    Chart source: Freeform Dynamics

    The outlook for SMB use of future technologiesIt is clear from the research that use of hosting goes hand in hand with a general emphasis on IT.

    Those with more of a focus on IT are obviously seeing some advantages in going down the hosting

    route. The research also indicates how many of the

    the latest technologies and in some cases using them.

    they would benefit from a way to unify all communication channels, such as email, mobile email,

    Instant Messenger, fixed phone, mobile phone (Unified Communications). The country where this

    idea was greeted most warmly was China, where over 99% said "yes".

    One of the other

    predicted hot

    technologies of 2010

    is cloud computing,

    according to the

    research two thirds

    of the respondents

    know about cloud

    computing and a fifth

    of the total

    respondents say they

    are using the

    technology. Of those

    Chart source: Freeform Dynamics

    Microsoft SMB IT & Hosted IT Index, January 2010

    The services we see here are far more concerned with business differentiation from an effectiveness

    point of view, i.e. they provide enhanced end user capability and allow ‘smarter’ ways for those

    within the business to work. The relationship between the emphasis on IT and such capability,

    -premise, is very clear indeed. This is consistent with functionality in

    tangible enablers of business value, and as hosted solutions lower the barrier to

    entry, it’s here that we see some of the greatest opportunities for business improvement.

    The outlook for SMB use of future technologies that use of hosting goes hand in hand with a general emphasis on IT.

    Those with more of a focus on IT are obviously seeing some advantages in going down the hosting

    also indicates how many of these companies surveyed are already familiar with

    the latest technologies and in some cases using them. Almost four in every five respondents said

    they would benefit from a way to unify all communication channels, such as email, mobile email,

    one, mobile phone (Unified Communications). The country where this

    idea was greeted most warmly was China, where over 99% said "yes".

    Chart source: Freeform Dynamics

    The services we see here are far more concerned with business differentiation from an effectiveness

    ility and allow ‘smarter’ ways for those

    within the business to work. The relationship between the emphasis on IT and such capability,

    premise, is very clear indeed. This is consistent with functionality in

    tangible enablers of business value, and as hosted solutions lower the barrier to

    entry, it’s here that we see some of the greatest opportunities for business improvement.

    that use of hosting goes hand in hand with a general emphasis on IT.

    Those with more of a focus on IT are obviously seeing some advantages in going down the hosting

    surveyed are already familiar with

    Almost four in every five respondents said

    they would benefit from a way to unify all communication channels, such as email, mobile email,

    one, mobile phone (Unified Communications). The country where this

  • 14 | P a g e

    Microsoft SMB

    that aren’t using cloud technology so far (but are familiar with the term), the respondents are split

    as to whether they would get busines

    industry still has work to do in terms of educating businesses about the benefits that they would

    draw from using the latest technologies, as well as

    terms themselves mean. The chart above looks at the use of both hosting and cloud and shows that

    those with more of a focus on IT are obviously seeing some advantages in going down the hosting

    route.

    It won’t come as any

    surprise that use of

    hosting also goes hand in

    hand with good financial

    performance too. Taking

    a step back, there are

    two primary reasons for

    this. Firstly, better

    performing companies

    tend to outsource more

    non-core activity, and IT

    hosting is consistent with

    this. Secondly, more progressive/growing companies are also more likely to see IT as an important

    enabler, and the hosted route means they can take advantage of more advanced functionality

    they can put enterprise class facilities in place that would be difficult or i

    premise because of cost, resource and/or expertise constraints.

    Conclusions 2010 may provide opportunities for an upturn for

    success. As explored throughout the research,

    enhanced efficiency and effectiveness it enables

    for IT, hence hosted solutions can be the best choice for an

    Hosted services are the most cost efficient way of getting high quality and professional

    communications services without large investments.

    such services on a subscription

    access to tools that would normally be out of their reach

    Microsoft SMB IT & Hosted IT Index, January 2010

    that aren’t using cloud technology so far (but are familiar with the term), the respondents are split

    as to whether they would get business benefit from it (46% agree they would). This shows that the IT

    industry still has work to do in terms of educating businesses about the benefits that they would

    draw from using the latest technologies, as well as cutting through the IT jargon to explain

    The chart above looks at the use of both hosting and cloud and shows that

    those with more of a focus on IT are obviously seeing some advantages in going down the hosting

    re progressive/growing companies are also more likely to see IT as an important

    enabler, and the hosted route means they can take advantage of more advanced functionality

    they can put enterprise class facilities in place that would be difficult or impractical to implement on

    premise because of cost, resource and/or expertise constraints.

    2010 may provide opportunities for an upturn for SMBs and IT will be a critical factor in their

    success. As explored throughout the research, IT in itself encourages more growth as a result of the

    enhanced efficiency and effectiveness it enables and fast growing organisations have a greater need

    , hence hosted solutions can be the best choice for an SMB in enabling and supporting growth.

    ices are the most cost efficient way of getting high quality and professional

    communications services without large investments. As small and medium businesses can pay for

    subscription basis, per user, they can greatly minimise the cost,

    access to tools that would normally be out of their reach.

    -ENDS-

    that aren’t using cloud technology so far (but are familiar with the term), the respondents are split

    s benefit from it (46% agree they would). This shows that the IT

    industry still has work to do in terms of educating businesses about the benefits that they would

    cutting through the IT jargon to explain what the

    The chart above looks at the use of both hosting and cloud and shows that

    those with more of a focus on IT are obviously seeing some advantages in going down the hosting

    re progressive/growing companies are also more likely to see IT as an important

    enabler, and the hosted route means they can take advantage of more advanced functionality – e.g.

    mpractical to implement on

    s and IT will be a critical factor in their

    lf encourages more growth as a result of the

    fast growing organisations have a greater need

    in enabling and supporting growth.

    ices are the most cost efficient way of getting high quality and professional

    businesses can pay for

    basis, per user, they can greatly minimise the cost, while getting

  • 15 | P a g e

    Microsoft SMB IT & Hosted IT Index, January 2010

    Contact Information

    For marketing information, please contact:

    Serge Khayat, Senior Marketing Manager - Hosting / Software + Services, Microsoft Communications

    Sector at: [email protected]

    For press information, please contact:

    [email protected]

    For additional information on Microsoft and Hosting, visit: www.microsoft.com/hosting