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Study: Small businesses to be big IT spenders

Buoyed by an upturn in the economy, small and midsize U.S. companies this year will boost IT budgets by a bigger margin than will large enterprises, according to Forrester Research.

Small and medium-size businesses will increase spending on information technology by 6.6 percent this year, a new study has predicted.

That's a much higher increase than the 1.7 percent rise predicted for larger companies, Forrester Research said in new data released Tuesday.

Forrester surveyed more than 1,000 IT decision makers in companies that have fewer than 1,000 employees and found those companies to be far more upbeat about their business outlook than large enterprises. Nearly 81 percent described their business climate as moderately strong, and 78 percent expected further improvement as the year progresses.

Recent business outlook studies have pointed to improved IT spending, buoyed by an economic upturn. Research firm IDC has projected a 5 percent increase in technology spending globally in 2004.

The growing optimism in the small-business market will see more money being spent on hardware, security software and information management software, Forrester predicted. New security investments are likely for 75 percent of small and midsize companies. About 74 percent are planning to purchase new servers, while 65 percent plan to buy new storage gear. Nearly 70 percent are looking to buy additional Internet connectivity and bandwidth, with 85 percent of these also likely to shop for networking hardware.

Forrester said that 61 percent of small businesses have upgraded at least one PC to Microsoft's Windows XP operating system, and 95 percent are planning to replace an average of one in four of their PCs.

The companies surveyed said they plan to buy directly from vendors, bypassing the middleman. Among the suppliers preferred by companies in the survey are Dell--which was the choice of 79 percent of the respondents--Microsoft, Cisco Systems and Symantec.