2024 Top 10 SMB and Midmarket business issues, IT priorities and challenges

Focused on growth and committed to new solutions that expand business horizons – the SMB market is on the brink of a multi-year growth trajectory.

They are here - Techaisle's annual SMB, Core Midmarket and Upper Midmarket Top 10 IT Priorities, IT Challenges, and Business Issues infographics, 13th year of Techaisle tracking at a WW level, and is sought after by IT vendors, channel partners, and media. Techaisle surveyed nearly 5000 SMBs and Midmarket firms, quota sampled to ensure adequate coverage of four small businesses (1-9, 10-19, 20-49, and 50-99 employees), three core midmarket (100-249, 250-499, and 500-999 employees) and two upper midmarket (1000-2499, 2500-4999) segments. As a result, the data represents a robust and reliable sampling of the market segment for IT products and services.

Techaisle surveys thousands of small and midsized businesses (SMBs) to understand technology imperatives and directions. The annual survey establishes context by asking respondents to identify their top business goals, technology priorities, and IT challenges for the upcoming year.

Redefining the art of the possible

The SMB market is a study in contrasts: the tension between boundless aspiration and a constrained reality. However, data shows that a market that has mastered the cloud and is excited by AI will dedicate itself to growth in 2024.

All SMB market segments are poised for growth in 2024. Small businesses (1-99 employees), which generally lack financial, technology, and human resources, often must react to conditions beyond their control. The small business segment tends to reflect the market directions set by larger competitors. Within the SB group, the priority of “increase business growth” has risen steadily over the past three years: the third-ranked business objective in 2022, the second-ranked pursuit in 2023, and the top-ranked business goal for the current year.

Upper midmarket firms (1000-4999) operate very differently. These businesses have formal management hierarchies and the reserves needed to establish and execute on longer-term strategic plans. In recent years, UMM firms have focused on various operational objectives, such as developing IT outsourcing strategies, reducing IT costs, improving product and process quality, and managing inventory. In 2022 and 2023, “increase business growth” was outside this group’s top five business goals. But UMM businesses share the optimism demonstrated by their SB peers for 2024, ranking business growth as their top business objective.

Core midmarket businesses (100-999 employees) represent a middle ground between SB and UMM organizations. CMM businesses have some strategic depth but need to react to the cost and agility of smaller companies and the market power of larger competitors. In 2022, CMM firms reported that “increase business growth” was their second-leading business goal. As an objective, growth slipped to sixth in the business priority list, behind product/service enhancement, IT cost reduction, and establishing data-driven decision processes. In 2024, though, CMM businesses, like larger and smaller competitors, are focused on driving growth.

Top technology priorities

The perspective provided by survey data evokes memories of the imperatives that have shaped SMB technology over the past several years. The pandemic-era urgency to establish support for mobility and remote work is evident in the 2022 results for SB, CMM, and UMM businesses. Awareness of the growing threat associated with a de-perimeterized environment and a growing cyber threat community shines through the emphasis on security solutions in 2023. Today, collaboration (a top-4 technology priority for all SMB segments) and security (ranked third by SB and CMM and fourth by UMM businesses) remain vital issues.

Cloud, though, is atop the technology priority list for all segments throughout the 2022-2024 timeframe. SMBs have been focused on integrating cloud into their business operations for years and will continue to refine their approaches in 2024. This approach works for SMBs: Techaisle research shows that SMBs with advanced cloud capabilities outperform those still learning to build cloud into their operations.

AI challenges SMBs

The data on SMB IT challenges lacks the continuity of the 2022-2024 perspectives on SMB business goals and technology priorities. In 2022, SMBs of all sizes sought ways to maintain infrastructure currency through the pandemic. In 2023, having shifted to the cloud to address the need to support an increasingly dispersed workplace – and confronted the bills arising from this change – SMBs focused on optimizing cloud use to reduce associated costs.

In 2024, all eyes have turned to adopting generative AI and AI-related capabilities. AI is the top-ranked challenge in all three SMB segments. It is interesting to note that implementing new strategic applications (many likely embed AI capabilities) is also a top-three concern in every SMB segment. Both of these trends will challenge SMB IT staff that lack needed skills. Techaisle expects that SMB demand for managed services and IT contractors will expand in response to these challenges.

Most small businesses and many CMM firms lack formal IT budgets, using operating revenue to address urgent remediation needs and respond to new opportunities where possible. This limited resource pool is evident in the SB findings and is a crucial issue for CMM in 2024. AI suppliers may explore variable pricing strategies to establish AI footholds in the 2024 SB and CMM markets.