Microsoft Talk

Global study of small businesses reveals growing demand for software as a service.

The research highlighted that many small businesses struggle to compete with big businesses and are unsure of how to get access to higher-quality IT services that could help them. Government support is often widely used and well-received, but in some cases, it is thought to be too limited. Small businesses face numerous challenges with IT but are also seeing the benefits that mobile working and social networking can bring.

Despite global concerns about an economic slowdown, most small businesses reported that they had performed well in the past year. Globally, 39 percent of businesses had grown, while 36 percent had remained steady in the past year. Hosted IT solutions appear to offer some of the answers raised by the small businesses surveyed. Not only does buying software on a subscription basis reduce the reliance on IT skills and offer enterprise-class security protection, but it enables businesses to focus on other business priorities.

The research also highlighted that some emerging markets are outpacing western countries in terms of new technology adoption. About 87 percent of Russian small businesses surveyed have branded company e-mail, while 63 percent have a customer database and an above-average 24 percent use mobile e-mail. Similarly, Russian small businesses are the most likely to have IT (97 percent), while fewer (91 percent) U.S. small businesses used IT.

Meanwhile, 67 percent of Chinese small businesses use social networking applications to talk to existing customers and 57 percent use them to promote their business. That compares with just 26 percent and 24 percent, respectively, of small businesses in the U.K. — typically seen as a mature market — that use social networking to talk to existing customers or promote their business. The research also found that 65 percent of the small businesses surveyed would consider buying IT services on a subscription basis, such as hosted e-mail, shared calendaring and other applications.

“Despite their varying businesses and greatly differing needs, many small businesses are becoming increasingly dependent on information technology and the Internet for networking, communications and sales. As they become more Web-savvy, we’re seeing that small businesses are starting to seriously consider hosted services to meet some of their IT needs,” said John Zanni, general manager, Software + Services Industry team, for the Communications Sector at Microsoft. “At this time of economic uncertainty, the benefits of buying IT services on a subscription basis become ever more apparent.”

The research, which surveyed small businesses’ attitudes on a range of areas, also found that many have “IT envy” for the resources of larger businesses. A vast majority — 79 percent — think that larger businesses gain significant advantage from having access to better IT resources. Despite this, 37 percent still use Web mail, such as Hotmail, Gmail or Yahoo! services, rather than business e-mail services such as Microsoft Hosted Exchange.

Meanwhile, small businesses’ main priority — managing relationships and customer service — was found to be highly dependent on IT, because 89 percent of firms also agreed that professional communications are important to their business.