AMI-Partners: SMBS in the U.K. to Spend US$2.2B on Storage & Security This Year.

The bulk of the spending will be on data storage and the rest on beefing up their IT security needs, says new AMI study

NEW YORK -- Small and medium businesses (commercial companies with up to 999 employees) in the U.K. are on track to spend up to US$2.2 billion on data storage and IT security this year, up some 15% over last year. Of this amount, the bulk of the spending of US$1.47 billion will be on data storage with the rest going towards beefing up their IT security needs, according to the latest report by New York-based Access Markets International (AMI) Partners Inc.

In the data security space, small businesses (up to 99 employees) in the U.K. are primarily spending their IT security budgets on anti-virus products and services. On the other hand, medium-sized companies (100 - 999 employees) are allocating funds to security services providers. MBs in the U.K. spent about US$187 million in outsourced IT security spending last year, with approximately 50% of that going to third party vendors.

Small businesses in the U.K. seem to be spending their storage budgets on hardware devices, principally for Desktop PC backup. Conversely, medium-sized companies are distributing funds to managed services in support of their data storage requirements. Although, inadequate protection from disasters or malicious attacks does adversely affect business productivity, hard drive failure is the leading cause of data loss among U.K. SMBs. On average, SBs in the U.K. incurred a cost of US$2,363 to recover from breaches or restore lost information, while the cost for MBs was higher at US$7,967, according to AMI studies.

"The need for business continuity has become more widespread, thereby pushing SMBs to protect their IT assets," says Jacqueline Atkinson, New York-based analyst at AMI. "As a result of the onslaught of security breaches, data losses and mandated industry regulations - particularly in the finance and healthcare sectors - IT security and storage will continue to be high growth markets within the SMB space."

The fear of malware and other online threats is the key reason for the vast majority of SMBs in the U.K. focusing on data security. However, in the data storage space, the leading investment driver is legal compliance for SBs, and expanding IT networks for MBs. "U.K.-based MBs continue to spend substantially on services for IT storage," Ms Atkinson says. "However, SBs in the U.K. spend more on hardware solutions. Last year they apportioned 74% of their total storage spending to PC and server equipment."

SMBs that have invested in a server are disbursing more on existing storage hardware. "One in three UK MBs told AMI that they are planning for direct attached storage (DAS) and network attached storage (NAS) systems," Ms Atkinson says. "PC storage is moving away from external drives to online or offsite data backup or disaster recovery, which is a pragmatic approach for SMBs to safeguard business critical data.

About the Studies

AMI's 2006-2007 U.K. Small Business Overview and Comprehensive Market Opportunity Assessment and 2006-2007 U.K. Medium Business Overview and Comprehensive Market Opportunity Assessment studies highlight these and other major trends in the context of current/planned IT, Internet and communications usage and spending. Products and services covered include established and emerging hardware, software, applications and business process solutions. Based on AMI's annual surveys of SBs and MBs across the U.K., the studies track a broad spectrum of issues pertaining to budgets, purchase behaviors, decision influencers, channel preferences, outsourcing, service and support. Also covered are detailed firmographics and critically important technology attitudes and strategic planning priorities. These data point to key opportunities and messaging hot buttons for vendors and service providers seeking to match their offerings to SMB market requirements.

For more information about this study, AMI-Partners, or our global SMB research, please call AMI-Partners at 212-944-5100, e-mail [e-mail], or visit the AMI Web site at www.ami-partners.com.

About Access Markets International (AMI) Partners, Inc.

AMI-Partners specializes in IT, Internet, telecommunications and business services strategy, venture capital, and actionable market intelligence -- with a strong focus on global small and medium businesses (SMBs), and extending into large enterprises and home-based businesses. The AMI-Partners mission is to empower clients for success with the highest quality data, business strategy perspectives and "go-to-market" solutions. Led by Andy Bose, the firm has built a world-class management team with deep experience cutting across IT, telecommunications and business services sectors in established and emerging markets.

AMI-Partners has helped shape the go-to-market SMB strategies of more than 150 leading IT, Internet, telecommunications and business services companies over the last ten years. The firm is well known for its IT and Internet adoption-based segmentation of the SMB markets, its annual retainership services based on global SMB tracking surveys in more than 20 countries, and its proprietary database of SMBs and SMB channel partners in the Americas, Europe and Asia-Pacific. The firm invests significantly in collecting survey-based information from several thousand SMBs annually, and is considered the premier source for global SMB trends and analysis.