Voice of IT TM

Spiceworks Inc., 7300 FM 2222, Bldg 3, Ste 100, Austin, TX 78730Tel: 1-512-628-8280 • Fax: 1-866-567-2744

Website: www.spiceworks.com/insightsEmail: insights@spiceworks.com

State of SMB IT 1H 2012

S e m i - A n n u a l R e p o r t O n S m a l l A n d M e d i u m B u s i n e s s Te c h n o l o g y P l a n s & Pu r c h a s e I n t e n t

Executive SummaryIn the last six months SMBs continue to show their strength. Budgets and technology adoption are all on the rise, but at a slower rate than the previous six months. Mobile moves into the forefront as tablets gain ground and IT pros struggle to find the right approach for managing employee owned devices.

The four key findings that emerged from this latest study are:

Virtualization and cloud adoption continue to rise; Reliance on virtualization deepens significantly.

Sixty-four percent of SMBs are currently using virtualization, and results show that SMBs are becoming more reliant on this technology with the number of application categories virtualized up to 3.1 vs. 2.1 a year ago. Cloud adoption increased only 4% in the last 6 months to 48%, but projections remain strong with 14% of SMBs planning to adopt cloud services in the next 6 months.

BYOD (Bring Your Own Device) is well established in SMBs, but IT pros have mixed opinions on managing these devices.

Three-quarters of SMBs manage employee-owned devices, indicating the BYOD trend is now a standard. But IT pros are still unsure on how they feel about managing these devices with 55% stating they fully embrace BYOD or believe it works well for some devices, while the other 45% haven’t formed an opinion or find it to be a headache for their department.

Tablets find a solid spot in SMBs.

In the last 6 months, the number of SMBs using tablets has increased from 33% to 45% with another 17% planning to purchase a tablet for their company in the next 6 months. If this projection holds true then 62% of SMBs will be using tablets for business by 2H 2012.

IT Budgets continue to increase while new hires remain steady. IT budgets grew 6% to an average of $152,000 in the last 6 months showing a strong, healthy trend toward investment in technology for SMBs. Nearly a third of IT departments plan to add staff in the next 6 months while 56% will keep their department headcount the same.

About Spiceworks Voice of IT®

The Spiceworks Voice of IT® market insights program publishes stats, trends and opinions collected from small and medium business technology professionals who are among the more than 1.9M users of Spiceworks. Survey panelists opt-in to answer questions on technology trends important to them.

To learn more, visit:www.spiceworks.com/voice-of-it

To receive updates on future research:Follow Spiceworks Voice of IT on Twitter at www.twitter.com/VoiceOfIt

Be the first to hear about Spiceworks Voice of IT insights, email: marketresearch@spiceworks.com.

I N T H I S R E P O R TExecutive Summary 2

SMB IT Budgets Continue to Grow 3

Budget Allocation Remains Consistent 4

New Hardware Grabs Largest Portion of IT Spend

5

Virtualization Reaches Mainstream 6

SMBs Deepen Reliance on Virtualization 7

Cloud Adoption Steadies but Outlook Remains Strong

8

Services in the Cloud…or Not 9

SMBs Love Their Tablets 10

BYOD Trend is Here to Stay but IT Pros Have Mixed Opinions

11

Background & Methodology 12

3

2H 2009

$143 $152$132$122$117

4% 56% 30%

$108

22% 20% 20%31% 31% 30%

1H 2010 2H 2010 1H 2011 2H 2011 1H 2012

ADDING STAFFREDUCING STAFF STAYING THE SAME

* 10% Don’t Know

% Adding Sta�Planned Budgets

A v e r a g e P l a n n e d B u d g e t s a n d P e r c e n t A d d i n g S t a f f O v e r T i m eBudgets show in thousands of dollars.

I T S t a f f C h a n g e s i n N e x t 6 M o n t h s

SMB IT budgets continue to grow.

The majority of respondents in this study (62%) are from companies with 20-250 employees. Data from all respondents show that annual budgets continue to rise in 2012 and have reached an average of $152,000. This is a 6% increase over the last 6 months. Nearly a third of IT departments plan to grow their teams in the next 6 months which is consistent to what we have seen over the last 2 waves of this study.

4

IT ServicesSoftwareHardware

40%

34%

26%

Hardware (New Purchase or Upgrade)

Desktop ComputerLaptop/Notebook ComputerServerStorage/SAN/NASWireless Networking

93%80%

70%49%

47%

61%53%

44%44%

42%

54%44%

43%34%

27%

Software (New Purchase, Renew or Upgrade)

Anti-virus/Anti-spamBackup/RecoveryEmail ClientProductivity SuiteVirtualization

IT Services (New Purchase, Renew or Upgrade)

Web HostingISPDomainEmail HostingHosted Backup/Recovery

Top 5 Planned Purchases in Next 6 Months:

2 0 1 2 A l l o c a t i o n o f A n n u a l I T B u d g e t

New hardware grabs largest portion of IT spend.

The largest portion of IT budgets are allocated to hardware purchases and 87% of respondents’ state this will be on new purchases vs. upgrades. Software purchases capture an average of 34% of the budget and spend will be split somewhat evenly across new purchases, renewals and upgrades with nearly 50% of respondents making each of these types of purchases. An average of 26% of the budget will go towards IT services and 31% of respondents state this will be for renewals.

5

1H 20122H 20111H 20112H 20101H 2010

19%

47%

34%34% 34%33%

35%

42% 40% 41% 40%

23% 26% 26% 26%

Software

IT Services

Hardware

A l l o c a t i o n o f A n n u a l I T B u d g e t O v e r T i m e

Budget allocation remains consistent with prior period.

While the allocation of IT budget stays steady since 1H 2011, the trend over time shows allocation toward hardware services decreasing and IT services increasing. This is most likely due to the adoption of more cloud-based services and the movement towards employee owned devices in the workplace.

6

A d o p t i o n o f V i r t u a l i z a t i o n O v e r T i m e

2H 20121H 20122H 20111H 20112H 20101H 2010

44%52% 54%

61%64%

77%Planned Usage (in next 6 months)Current Usage

Virtualization reaches mainstream.

While the pace of adoption has slowed over the last 6 months, virtualization continues to grow among SMBs and has increased 18% over the last year. In the next 6 months, 13% of respondents state they plan to start virtualizing.

Any environment with more than 2 to 4 servers is a good virtualization

candidate. If you’re installing more than one critical app on

any of those servers, then you are a GREAT

virtualization candidate.

ITSlaveSpiceworks User

community.spiceworks.com

F R O M T H E CO M M U N I T Y

7

1H 2010EMAIL/

MESSAGING

PLAN TO VIRTUALIZEIN THE NEXT 6 MONTHS

ACTIVE DIRECTORY/LDAP/AUTHENTICATION

OTHERCOMMONINFRASTRUCTURE

(DNS, DHCP, WSUS, ETC.)

CORE APPLICATIONS(WEB SERVERS,

DATABASES, ETC.)

66%10%

58%9% 68%

8%74%8% 81%

8%Planned Usage (in next 6 months)Current Usage

1H 2011

1H 2012

2.2

25%

2.13.1

SMBs deepen reliance on virtualization.

While overall adoption of virtualization has slowed down in the last 6 months, companies who are virtualizing have increased the number of application categories virtualized from 2.1 to 3.1 in the last year. In addition, a quarter of those respondents currently virtualizing plan to virtualize additional application categories in the next 6 months – with core applications and common infrastructure as the top applications to be virtualized.

Application Categories Today and Planned for the Next 6 Months (by those Virtualizing Today)

Average Number of Application Categories Virtualized Over Time

64% of SMBs Virtualize Today

8

C l o u d A d o p t i o n O v e r T i m e

2H 20121H 20122H 20111H 20112H 2010

14%28%

46% 48%

62%Planned Usage (in next 6 months)Current Usage

Cloud adoption steadies but outlook remains strong.

Forty-eight percent of respondents are using cloud services today. While this measure shows a 4% increase over the last 6 months, the rate of adoption is much slower than the 64% increase from 1H 2011 to 2H 2011. The good news is anticipation for IT pros to adopt cloud services in the next 6 months remains strong at 62%.

Cloud is a fairly nebulous term to many people and it covers a lot, but aside from

a physical device and an Internet connection to get

to the data or services there is nothing that requires it to

be local. Every service can be put in the cloud.

Alex3031Spiceworks User

community.spiceworks.com

F R O M T H E CO M M U N I T Y

9

To p I T S e r v i c e s

In the Cloud

Web Hosting

Email Hosting

Data Backup/Recovery

Content Filtering

Application Hosting

Data Storage

Not in the Cloud

Logistics ManagementVoIPSecurityEcommerceCRM

Planned Usage(in next 6 months)

No Plans(in next 6 months)

Current Usage

49% 8%11%

17%8%

12%

32%25%

24%

23%12%19% 73%

66%65%

64%63%

Services in the cloud...or not.

Share of hosted vs. on-premise services remains consistent to the previous six months with web and email hosting topping the list of cloud-based services used by SMBs. While data backup/recovery, application hosting and data storage are part of the top 6 cloud-based solutions used today, they are also the top 3 solutions IT pros plan to add in the next 6 months. Sixty-five percent or more of respondents have no plans to use cloud-based services for logistics management, VoIP and security indicating that IT pros prefer to keep these technologies on-premise.

10

Use tablets on network today

Plan to implement tablets in next 6 months

No plans to implement tablets

Not sure

Use tablets on network today

Plan to implement tablets in next 6 months

No plans to implement tablets

Not sure

Less than 20 employees 20-99 employees

100-249 employees 250+ employees

40%41%40%

22%

32%

17%

14% 13%

31%53%48%

35%45%

17%

35%

3% 6% 2%

3% 3%62%PLAN TO BE USINGTABLETS IN NEXT6 MONTHS

By Company Size

SMBs love their tablets.

In 1H 2012 45% of SMBs report they are using tablets for business up from 33% in 2H 2011. By company size, 53% of SMBs with 250 or more employees are using tablets today vs. 40% of SMBs with less than 20 employees. But these smallest of the small plan to catch up in the next 6 months with 22% planning to adopt tablets during this time.

Current and PlannedDeployment of Tablets

Check out our infographic on tablets in the workplace: www.spiceworks.com/voice-of-it

11

Types of BYOD Tablets

iPad Android

32%41%

Types of BYOD Smartphones

iPhoneAndroid Blackberry Windows

60%55%

36%35%

Allow BYOD

Do not allow BYOD

75%

25% 20% 20%35% 25%Fully embrace this trend since this is the future

It’s a headache for our department

Works well for some devices, not so well for others

Haven’t formed an opinion yet

BYOD in SMBs Attitudes toward Managing BYOD Devices

BYOD trend is here to stay but IT pros have mixed opinions.

One trend we keep hearing about is BYOD (Bring Your Own Device). To understand how IT pros are dealing with this trend we explored this topic further. Results show this trend is here to stay with 75% of respondents currently managing personal devices for employees. Twenty percent of IT pros fully embrace BYOD and another 35% believe it works well for some devices. The remaining 45% have mixed feelings and either believe it is a headache for their department or haven’t formed an opinion yet.

There are opportunities (for BYOD), just have to have the infrastructure in place to support the

actual work.

PSX_DefectorSpiceworks User

community.spiceworks.com

F R O M T H E CO M M U N I T Y

Background & Methodology

The State of SMB IT Report is a semi-annual study released by Spiceworks Voice of IT® market insights program, which publishes stats, trends and opinions collected from small and medium business technology professionals who are among the more than 1.9 M users of Spiceworks.

The 1H 2012 State of SMB IT is the sixth edition of this study which is designed to keep an active pulse on the happenings of small and medium business IT professionals and IT departments. Responses to this latest survey were collected from 1,498 small and medium business IT professionals around the world.

Copyright Notice

The contents in this report are a result of primary research performed by Spiceworks. Unless otherwise noted, the entire contents distributed as part of this report are copyrighted by Spiceworks. As such any information made available by any means in this report may not be copied, reproduced, duplicated, published, displayed, transmitted, distributed, given, sold, traded, resold, marketed, offered for sale, modified to create derivative works or otherwise exploited for valuable consideration without prior written consent by Spiceworks.

This report contains information of fact relating to parties other than Spiceworks. Although the information have been obtained from, and are based on sources that Spiceworks believes to be reliable, Spiceworks does not guarantee the accuracy, and any such information might be incomplete or condensed. Any estimates included in this report constitute Spiceworks’ judgment as of the date of compilation, and are subject to change without notice. This report is for information purposes only. All responsibility for any interpretations or actions based on the information or commentary contained within this report lie solely with the recipient.

All rights reserved. 2012.

Spiceworks Inc., 7300 FM 2222, Bldg 3, Ste 100, Austin, TX 78730Tel: 1-512-628-8280 • Fax: 1-866-567-2744

Website: www.spiceworks.com/insightsEmail: insights@spiceworks.com

About Spiceworks

Spiceworks™, the world’s largest social business platform for IT, connects 1.9 million IT professionals with more than 1,000 technology brands. By combining a Facebook-like community with free IT management software, Spiceworks helps businesses to discover, buy and manage $351 billion worth of technology products and services each year.

For more information visit:http://spiceworks.com/

Want to use data from this report? Go to www.spiceworks.com/voice-of-it/termsPublished on May 8, 2012

ManufacturingEducationIT Service ProviderHealthcareGovernment

15%10%

9%7%6%

Non Pro�tFinanceEngineeringRetailOther

5%5%4%4%

35%

North America

EMEA

Asia-Paci�c

Latin America

47%

33%

15%4%

Less than 20 employees

20-99 employees

100-249 employees

250 or more employees

19%

20%

28%

34%

Employee Size Region

Industr y