Today there are almost 8 million small and midsized enterprises (SMEs) in the US alone, and these business customers spent over $85 billion in IT spending in 2003. They expect to continue to expand their capabilities and their IT budgets in the coming years and yet they are the least understood of all business consumers. IT vendors seeking to compete in this market must understand their special information and functional IT needs and be ready to grow with them as many of them develop into larger and more successful firms.However, little is known about:

• When and how SMEs assess their IT needs;
• How SMEs progress through the purchase process;
• The challenges SMEs face at certain points in the purchase process.

As a result, much of what is offered on the market or proposed to the SME segment is off target in meeting their IT business needs. The “disconnect” between current IT offerings on the market and what SMEs need has resulted in ineffective, inefficient targeting and servicing of this sector, and is choking off potentially profitable gains that would otherwise result from a solidly informed connection to the SME sector.

Deloitte Research undertook this exploratory study of IT purchasing by SMEs in an effort to understand decision making in different stages of the information technology purchase process. The resulting study identifies the key factors impacting technology purchase decisions by small and medium enterprise owners. In particular, they found that:

• SMEs need information and help to manage their IT growing pains;
• Price isn’t necessarily the bottom line when considering IT purchases;
• Vendor websites and reputations are extremely important in the minds of
• SME decision makers when looking for information and making purchase decisions.

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