Technology Spending in the Current Business Environment

The latest stock market trend (or lack of it!) makes me wonder where businesses are headed, in the short term. A sluggish economy at best, along with stubbornly high unemployment numbers does not spell “recovery”. Yet, there appears to be a dull, silver-gray lining in the gloomy clouds - technology spending. Was it just yesterday that Apple was pronounced the “Golden Apple” because its market value was more than Exxon Mobil, the giant money-making machine? Businesses that are so reluctant to hire, are spending money on technology in a heartbeat. Our clients have layed off workers, yet seem ready to take their technology infrastructure to the next level. Businesses and consumers have not stopped spending on technology. Small and medium businesses will spend more than $120 billion on new and emerging technologies in 2011, a substantial increase from 2009.

For businesses, the thrust toward infrastructure upgrade comes from one source – hardware and software vendors. When Microsoft says it is no longer going to support older versions of its flagship products, businesses scurry to get upgrades. Hardware sale is a natural consequence of most software upgrades. Electronic Medical Records (EMR) adoption, away from paper-based records is mandatory for all physician practices now. To realize the full power of an EMR system, these practices are required to move from the popular, low cost peer-to-peer network, to a more robust client-server environment. For engineers, the push towards state -of-the-art 3D graphic imaging calls for cutting-edge technology and older computers are difficult to provision for these offices.

The need to stay competitive and productive while running on a lowered budget and smaller staff has made emerging technologies an attractive option for small and medium businesses. Spending a few thousand dollars for hardware, software or technology support seems like an easier pill to swallow than hiring a full time employee.

Finally, EMR adoption and government funding for national infrastructure reconstruction through ARRA (American Recovery and Reinvestment Act 2009) has pumped money for businesses to bid for and win Government and Public Sector contracts. Hardware/software spending is a clear winner in this subdued economic environment. While iPads and iPhones will continue to push consumer technology spending towards Apple’s way, core technology as well as new and emerging technology spending will take a healthy bite out of overall budgets for small businesses - pun intended!