In-Stat MDR has a study showing that the U.S. small business market will spend over $170 billion on information technology in 2004, an increase of more than 5% compared to expenditures in 2003. According to In-Stat MDR:

“Although individual firms’ IT budgets are relatively small, customers in this market represent a tremendous opportunity for IT providers. Telecom, applications and LAN equipment should be particularly interesting, as these are expected to be key areas of growth in this market moving forward. In-Stat/MDR expects that small businesses will spend more than $215 billion on IT products, services, and personnel by 2008.”

In-Stat MDR says the small business market accounts for roughly 31% of total U.S. business IT expenditures. It is the second largest market after the enterprise (large business) market.

Here at Small Business Trends we follow a large number of research reports from a variety of research firms. One element of the In-Stat MDR research that we find especially useful is the clear way they delineate the small and midsize business market. In their lexicon, a small and home office (SOHO) business has 1 to 4 employees. A small business has 5 to 99 employees. Midsize businesses have 100 to 999 employees. A firm with 1000+ employees is considered the enterprise (large business) market. Defining markets according to size — in this case employees — positions vendors to better target each segment’s distinct needs.

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