This year, cloud computing, mobile applications and collaboration tools are expected to be front and center for the small business market. The days of an abundance of free applications, however, could slow down.
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“In 2010, as the economy comes out of recession, small businesses will be more willing to spend again, but only for solutions that will provide demonstrable bottom and/or top line business benefits,” said Laurie McCabe, partner at Hurwitz & Associates, an IT consulting company. “Small businesses will spend only if they believe that the investment will help them operate more profitably, grow revenues, increase productivity, save money or gain time-to-market advantages.”
In December 2009, All Covered, an IT-services company for small businesses, did an online survey of more than 100 business owners and found their technology investments in the New Year will focus on productivity, work-flow efficiencies and reducing costs. The survey found 42% of respondents plan to invest in technology with an eye toward increasing sales and marketing, 37% plan to spend on remote access products while 33% plan to spend on collaboration systems.
Cloud computing, or computer hardware and software offered over the Internet is expected to be a hot trend in the New Year, not only because it saves money but it also reduces the time spent managing computer systems. But small businesses aren’t expected to abandon on-site systems altogether. McCabe predicts a hybrid model will emerge that combines cloud computing and physical systems.
“In 2010 vendors will offer a greater range of targeted solutions for hybrid environment requirements to spur SMB interest and traction. Virtual desktops, disaster recovery, on-demand computing and storage will feature prominently in vendors’ lineup,” McCabe said in her top ten New Year predictions.
According to All Covered, small businesses’ comfort level with cloud computing is growing, with more and more companies starting to store key data off site.
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“2010 will be a very big year in the continuing build out and maturing of the cloud services,” noted market-research company IDC in its top ten technology predictions.
The New Year is also expected to bring a host of new mobile devices from the likes of Google (GOOG), Dell (DELL) and Apple (AAPL), with new tablets and smart phones being launched in droves. IDC predicts in 2010 there will be more than 1 billion mobile devices that can access the Internet.
As the number of web-accessible devices proliferates, so will the applications geared toward small businesses that use those devices, predicts McCabe. She said in 2009 vendors that provide local mobile-search services saw revenue increase 50% to 100%, and next year more of the same is expected.
“Things will continue to heat up as new Google Android-based smart phones continue to swarm the market, Dell’s new division focused on mobile devices debuts, Apple’s iPhone AppStore expands and vendors such as RIM and Nokia extend their own applications in response to Apple’s success,” said McCabe. She predicts vendors that can help small businesses create engaging mobile content also will stand to benefit.
Since saving money is expected to be a key trend for small businesses, collaboration software over the Internet is an area that should garner interest among small businesses and those serving them.
“Anything that can make people work better together is going to drive investment, “said Edith Gong, marketing manager at All Covered. Many small businesses don’t have internal Intranet so Internet-based collaboration software like Microsoft’s (MSFT) Sharepoint or SugarCRM could see strong demand.
“It saves small businesses time and money,” added Nick Pegley, vice president of marketing at All Covered. Just because the CEO is out of the office, approvals don’t have to be stopped and people in different places can stay connected, he said.
Many small businesses have been able to take advantage of free web-based applications from financial management to collaboration tools. While the big companies like Google can continue offering up applications for free, start-ups facing pressure to make money may not be able to do so for much longer, predicts McCabe.
“There may be no such thing as a free lunch in the physical world, but there is an abundance of free very low-cost software as a service tools,” said McCabe. “With more people starting their own businesses, often on a very tight budget, use of these services will continue to rise.”
That could result in a lot of these free services going away or being acquired, but some should prevail. McCabe predicts Freshbooks, the online financial record keeping service and Zoho, the online provider of a host of applications will be survivors.