Network Computing is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Communications Tempts Small Businesses, But Bleak Economy Means Most Aren't Ready To Buy

A new survey by Avaya shows that three quarters of SMBs think communications is important, but won't consider buying unless they can see a clear return on investment. The rest aren't ready to spend, period. Equally telling, only a quarter of small businesses are confident enough to invest in technology today.Avaya used e-Rewards to ask 80 execs at companies with fewer than 100 employees about the importance of communications to their business, and 75% said: "Its critical to my business and I would spend money on it if I can see a justified return for the investment." Another 16% agreed that: "Its very important but Im not willing to spend any money on it in todays environment." The rest of the respondents simply said "It's not a priority."

Unfortunately, the economic crisis means that even those companies interested in communcations aren't ready to pull the trigger quite yet. Only 25% said they are confident enough "invest in technology [today] as a way to differentiate and grow." Just over a third (34%) said they might be ready within a year, and another third (34%) said it would take one to three years. A truly pessimistic 7% said it's not going to happen for three years or more!

Does this chart show how long SMBs think the recession will last?

The survey also found that the crisis is affecting SMBs in many ways. Keeping existing customers spending was the biggest challend for 34%, while cutting costs was the key for 28%. Another 16% worried about retaining their customers, and 6% each were losing sleep over making payroll or having to cut prices. Only 3% said their biggest problem was keeping employees - but I'm not sure whether that meant not having to lay them off or having them leave for better jobs.

The economy is also taking a toll on innovation, as less than a quarter (23%) see "uncertain times as a great opportunity to innovate." 41% say they'll invest in technology if they can find the right opportunity, while 28% are looking for innovative technology but have no money to invest and 8% simploy don't have the money, period.

With those kind of macro-economic factor at work, it's no suprise that two thirds of SMBs (67%) cite costs and budget issues as specific obstacles to communications technology. 9% are looking for ROI, 5% think new communications technology is too much trouble to implement, and another 9% are simply clueless. A paltry 10% is actually investing in communications technology.

Small businesses reveal what's stopping them from buying communications equipment.

If they could spend on new communications technology, what would they buy? Almost half (43%) say e-mail is the most critical communications tool, while a third (34%) say desktop phones and 12% say mobile and smart phones. Only 1% cite Instant Messaging. Meanwhile, 16% would use communications technology to let their employees work from home, while 69% would be willing to start a trail of the concept.

What does it all mean? Well, it seems clear that SMBs want communications technology, but that many are so scared by the Great Recession that they can't justify even good investments right now. I'm thinking that we'll know the recession is on the way out when that sentiment starts to change.

Follow Fredric Paul on Twitter @
Follow on Twitter @
Put a bMighty gadget on your iGoogle page
Get bMighty on your mobile device