HP Studies How Small Businesses Do IT - Page 2

By Patricia Fusco | Posted February 20, 2004
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Single Source Simplicity
While many small businesses are inclined to go it alone when selecting and purchasing new computers and related communications services, these same businesses generally tend to leave configuration and servicing to local professionals. Thirty-nine percent feel strongly about the need for reliable local service and support in order to minimize downtime and ensure productivity.

It's not just information systems — small- and medium-sized companies want whole package solutions from their technology providers. The vendors that support integrated information, communications and servicing packages using local talent, will be the provider of choice for many small businesses.

Though most companies, especially the larger ones, will turn to a local service provider to tackle thorny IT problems, the overwhelming majority — 94 percent — decide what to buy on their own. In addition, 65 percent of small businesses prefer to install their own computer equipment and 63 percent perform their own routine maintenance of the equipment.

However, significantly fewer companies (52 percent) are up to the task of configuring new purchases on their own — this task is more likely left to third-party service providers. The tendency to buy and install their own office equipment is significantly greater for small companies with 6-10 employees — 80 percent purchase their own equipment without assistance and 70 percent install and even configure their own gear.

Maintaining a technological edge is not easy for small businesses when there are so many options. The complexities of bundling the right communications packages along with right information processing packages can be a mind-boggling experience. Consequently, 63 percent of small businesses surveyed are inclined to purchase complete hardware, software and communications solutions from a single vendor — 22 percent of these companies strongly support single source solutions. Ergo the smaller the company, the more attractive a single vendor solution is.

Charge IT!
Finally, while the survey respondents are most inclined to pay for their technology improvements using credit, very few are aware that they can use a special technology tax credit (Section 179) to offset the cost. It's alarming, but true — over half of the business that took part in the survey had never heard of the Sec.179 tax credit.

Interestingly, the study was not strictly focused on U.S. businesses. However, one might assume that businesses with more experience would be more knowledgeable. This does not turn out always to be the case. The least knowledgeable are businesses that have been in operation for at least 5 years — 74 percent of which reported they never heard of the Sec.179 tax credit.

Charge ITFar more disturbing than missing out on short-term tax credits, is that fact that small businesses prefer credit cards are the primary means of payment for office technology purchases (46 percent). Even the largest companies surveyed are apt to pay by credit card. Far fewer respondents pay by cash (29 percent), vendor financing (13 percent) or by using a small business credit line (9 percent).

While the need to make a quick purchase, such as the replacement of a laser copier, may be more pressing for smaller businesses than the interest rate on their charge cards, it's troubling to see that credit cards could dictate IT equipment buying strategies. Such buying patterns almost guarantee that a small business will forego finding the greatest return on their investments. The need for the office equipment seemingly overrides the need to develop a long-term buying strategy.

The Fine Print
The HP-COMsciences poll represents a snapshot and as such, the results are only indicative of sentiments at the time the survey was conducted. Moreover, the poll was not intended to be representative of all U.S. businesses — rather it was a sampling of opinion of a range of small and medium sized companies varying in business experience.

The study illustrates that HP is well-positioned to continue to rake in its market-leading share of IT sales to small businesses. HP's product offerings range from IT infrastructure and equipment to basic computing devices and digital imaging products. Of course, HP's printers aren't too bad, either. More than anything else, HP can provide small businesses with the flexible office systems they demand, and it can do so in a price-conscious manner that allows small businesses to compete with larger entities. HP is also a direct sales powerhouse and maintains relationships with local resellers and developers in more than 200 counties worldwide. Now if HP just offered a charge card, it would be perfectly aligned with small business IT buying strategies.

< Back to Page 1: Good, But Could Be Better

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