No category of connectivity services customer is more varied than the “small and medium business.” That category can include home-based businesses, organizations with few employees or sometimes organizations with up to 1,000 employees.
But employee count also varies. Software-based businesses can generate much more revenue than other businesses. So even some “smaller” businesses can produce enough revenue that they spend as much as enterprises do on connectivity or computing services and infrastructure, as shown in the Flexera 2021 State of the Cloud report, for example.
The report includes 15 percent SMB respondents, including SMBs spending as much as $12 million on cloud services annually, and 38 percent spending at least $1.2 million a year on cloud services.
Most firms spend between 1.2 percent to 5.9 percent of revenue on information technology, the exception being financial services firms that can spend as much as 11.4 percent of revenue on IT, according to Computer Economics.
The Flexera study is led by firms in IT, financial services and healthcare. Some 64 percent of respondent organizations are in those fields. As such, the survey is disproportionately representative of leading users.
The other important observation is that revenue--rather than firm size--likely is the better way to classify the firms considered to be “SMBs.” They might fit the definition in terms of employee count, but not in terms of revenue.
A financial services firm of 500 people, spending eight percent of revenue on IT, and $21,000 per employee might generate $131 million in annual revenue. The point is that a financial services firm might generate far more revenue than its employee base suggests. Such a firm might be “small” by employee count, but at least mid-size by revenue.
source: Flexera
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