The downturn in the U.S. economy is having a significant impact on small and medium business (SMB) priorities and plans for technology acquisition. The concern is real, and impact potentially profound, with variations by company size, industry, and attitude segment, according to a recent IDC survey. As a result, 38% of small firms are more likely to delay IT spending, and 42% of medium-sized businesses are more likely to reduce IT spending.

"The majority of SMBs are extremely or strongly concerned about the current and expected state of the U.S. economy over the next 12 to 18 months," said Justin Jaffe, senior research analyst for SMB programs at IDC. "Although SMBs are expected to drive greater growth in IT spending than the corporate IT market overall, it will be critical for vendors to understand how changing economic conditions will impact the spending habits of companies of certain sizes, vertical industries, and attitudinal characteristics."

Among other key findings are the following:

* Businesses in the architecture/engineering, legal, retail, and manufacturing sectors are the most likely to delay IT spending, and wholesale, insurance, and legal firms are the most likely to reduce IT spending.

* Small and medium-sized businesses are more likely to focus IT investment on tactical projects, which deliver immediate benefits, than strategic projects.

* Cloud computing initiatives are not being driven by economic concerns, save for the small minority of SMBs that indicate that they will look more closely at hosted solutions as a result of the economy.

* Fewer than 50% of SMB 2.0 firms, the most forward-looking group, are extremely or strongly concerned about the U.S. economy, compared with approximately 70% of IT Indifferent firms and 60% of Pragmatist firms.