NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

By Ray Le Maistre

Small- and medium-sized enterprises/businesses (SME/Bs) are the lifeblood of economies, driving GDP, employing a high proportion of most countries’ working populations and, in turn, playing a key role in economic ecosystems as consumers of products and services. There are more than 400 million of them around the world. And like their larger peers, SMEs are undergoing what is generally referred to as a ‘digital transformation’, which can roughly be translated as a greater reliance on connected, near real-time and increasingly cloud-based platforms for operational and customer-facing activities.

And, of course, SMEs are, collectively, significant users of IT and communications (broadband and mobile) services, so much so in fact that research and consulting house Analysys Mason estimates that this year SMEs will spend $1.4tn on IT products and services and that this will increase at a compound annual growth rate (CAGR) of 7.5% for the next five years. “Cloud-based services will drive this growth because they support a distributed workforce, improve efficiency and provide business resiliency,” noted Analysys Mason in September, adding that “SMB IT spending on cloud-based categories is expected to grow from $600bn in 2022 to $1tn in 2027.”

Photo courtesy of Zonie Occeña.