NPD Reports 77 Percent of Small and Medium Businesses Will Spend the Same or More on PCs in 2010

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U.S. small and medium businesses (SMB) are more likely to spend money on PCs this year than on any other major IT hardware category, according to leading market research company The NPD Group’s SMB Technology Report.

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PCs are clearly an important target for corporate spending in 2010

U.S. small and medium businesses (SMB) are more likely to spend money on PCs this year than on any other major IT hardware category, according to leading market research company The NPD Group’s SMB Technology Report.

According to the report, more than three quarters (77 percent) of SMBs plan to spend more, or about the same, on new PC equipment in 2010 versus what they spent in 2009. Overall, 41 percent of SMB PC purchases are expected to go through manufacturer direct channels, a percentage that remains consistent regardless of firm size. As might be expected, 43 percent of under-50 employee firms intend to use retail or ecommerce channels for their PC purchases. With larger firms, however, that share moves rapidly towards VARs and national resellers. More than 40 percent of purchases in firms with more than 50 employees are likely to use those channels.

“PCs are clearly an important target for corporate spending in 2010,” said Stephen Baker vice president of industry analysis at NPD. “Continuing to maintain and upgrade technology was cited by 70 percent of PC buyers as a key consideration for SMB buying in 2010 after cutting back in 2009. And since most of the pause in buying came from larger firms, 80 percent of firms with more than 200 employees intend to buy PCs in 2010 to help maintain their corporate infrastructure.”

PC purchasing is being accelerated by 51 percent of SMBs to support new growth opportunities, and 41 percent are using increased PC purchases to support new hiring. Overall, 73 percent of firms surveyed said they plan to buy PCs. By company size, 75 percent of companies with 50-100 employees plan to buy PCs this year, while only 60 percent of companies below and above that size (up to 1000 employees) plan to buy. Even though PC spending is on the rise, it is also the most vulnerable category should the economy start to slow again. Thirty-eight percent of companies that say they plan to reduce PC spending this year are doing so because of budget cuts, and another 18 percent sited staff reductions. Both percentages are nearly double the total IT hardware market average for each category.

Overall, only 23 percent of firms planned to reduce PC spending this year. On average, firms plan to spend about 32 percent less on other hardware categories such as storage, networking, servers, and printers. And while PCs had the largest proportion of steady or increased spending, storage equipment has the biggest upside in terms of spending potential with 37 percent of firms planning to increase spending in 2010 versus 32 percent of firms spending additionally on PCs.

To find out more about what’s driving SMBs to want to spend more money in 2010 read Stephen Baker’s blog post on The NPD Group Blog.

Methodology

The online survey was fielded between March 29 and April 30, 2010. The 250 respondents in this survey are LinkedIn members who are IT decision makers and influence PC, printer, networking, storage, and server purchasing decisions at firms with less than 1000 employees. Survey respondents were also asked about brand preference, U.S. region, and market vertical.

About The NPD Group, Inc.
NPD is the only source for total commercial reseller channel sales for the U.S. technology market. Our monthly and weekly point-of-sale reports provide timely information and insights including unmatched detail down to the item level. Reports are available for all key technology categories including PCs, printers and supplies, and networking and storage. These categories can be viewed in three separate sub-channels: direct market resellers/national integrators, independent office product dealers, and contract stationers. Over 90 manufacturers, commercial resellers, and financial analysts rely on NPD to help them make more informed business decisions in product development, marketing, sales, and other areas. For more information, contact us or visit http://www.npd.com/ and http://www.npdgroupblog.com . Follow us on Twitter: @npdtech and @npdgroup.

FOR MORE INFORMATION:
Sarah Bogaty
+1 516 625 2357
sarah.bogaty(at)npd(dot)com

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