Jumpcloud has released its Q3 2024 SME IT Trends Report, “Detours Ahead: How IT Navigates an Evolving World” (registration required). It highlights concerns over Shadow IT, cyberattacks, AI, device sprawl, funding, a lack of resources and staffing.
Greg Keller, Co-Founder and Chief Technology Officer, Jumpcloud, said. “What’s keeping them up at night is what they can’t see — 84% of IT admins worry about shadow IT. To help combat the security holes shadow IT creates, IT needs to deploy tools to help spot rogue apps. This will give IT teams the control and visibility they need to keep organizations safe.”
What does the report tell us?
At 40 pages, this report has a chunk of stuff to digest. It shows a high level of uncertainty for many SMEs that goes far beyond IT. Issues such as national elections, layoffs, and pricing for software licences threaten significant disruption. In addition, tool sprawl, Shadow IT, and security are heaping pressure on IT departments.
- 51% of respondents said they had not experienced layoffs in the last six months. By comparison, 49% had experienced layoffs, and 39% expected layoffs in the next six months. What is not clear is why those layoffs occurred. The use of AI? Greater automation? Companies downsizing? All are possible, but the lack of qualitative insight means there are no answers in this report.
- Elections are always an unsettling period for businesses. 49% of IT professionals said this was causing uncertainty. Why this should be, needs to be explained, but differing views on data protection, encryption and even data sovereignty are likely to be among those concerns.
- While price increases are still an issue for 75%, this is down from the figure of 88% who reported this in Q1/24.
- IT spending is always a topic of concern, given the pressure departments are under. Interestingly, over three-quarters (77%) said it was up. 33% have seen an increase of 10-20%, while 17% saw an increase of over 20%. Spending increases are expected to continue throughout 2024, though at a slightly reduced rate. 44% expect a slight increase, and 26% expect it to increase significantly.
- Unsurprisingly, many respondents mentioned tool sprawl. 84% would prefer a single platform that consolidates all their security tools. 45% currently deal with 5-10 tools, 18% deal with 11-15 tools, and 10% have to juggle more than 16 tools.
The security challenge
Respondents were asked about eight IT challenges. IT security (60%) was the biggest issue by far. Compounding that, 50% are more concerned about security posture than they were six months ago.
One area that always impacts security is shadow IT. It has been an issue for more than three decades. Shadow IT has surged with SaaS applications within the reach of departmental budgets and work from home, requiring a change of tools.
When it comes to specific cybersecurity risks, 40% say network attacks are the greatest concern. This is followed by ransomware and software vulnerabilities, both at 31%, and shadow IT (29%). The latter is especially worrisome as IT cannot patch what it cannot see or control, and shadow IT will play into concerns over both ransomware and vulnerabilities.
Despite the risk that shadow IT brings, 36% are too busy to deal with it. However, 32% say they need more tools to discover the applications employees use. This goes far beyond shadow IT. It shows a major cybersecurity awareness gap that needs addressing quickly.
On a positive note for IT, despite the numbers that have seen and expect to see staff reductions, that is not the case for IT security teams. 84% have at least one IT security expert on staff, and the majority (73%) say they can recover from a cyberattack.
MSPs are an SME BFF
Despite 84% of SMEs having an in-house IT security expert, they cannot go it alone. 76% are already working with a Managed Services Provider. 29% rely fully on the MSP to manage all aspects of their IT program, and the remainder rely on the MSP to support the internal IT team.
This report has some good news for MSPs. In addition to the 76% already using them, 12% are considering signing up for an MSP. Additionally, 67% say they will increase their MSP investment over the next year.
However, MSPs must not take SMEs for granted. SMEs want more for their money from MSPs. They are unwilling to be held hostage to price increases, with 28% changing their MSP because they became too expensive. In addition, some have downgraded their relationship due to MSPs not investing in training and skills.
That latter point raises an interesting challenge for MSPs and one that has been seen in other areas. Accountants, for example, have had to be more than just number crunchers as customers move to SaaS solutions. They are remaking themselves as trusted business advisors to unlock new revenue streams.
MSPs must now do the same. Investing in staff is a positive move that will play well with SMEs. Additionally, SMEs will need skills as they look to newer technologies such as AI and automation. MSPs are in a unique position to act as both providers and consultants if they are proactive about skilling up their staff.
AI is the elephant in the room
SMEs see AI as lowering costs and giving them a business edge. They are actively seeking to add AI to their business but it comes at a cost. It is more than just the acquisition of AI that is challenging. Data protection, privacy, compliance, and the skills to get the most from it are all barriers. Additionally, getting data ready and the processing requirements of AI also need to be planned.
Importantly, there is also a realism to AI that is being understood by SMEs. 22% feel the impact of AI will be less than expected, while 23% see it as potentially greater. The speed of implementation and seeing the benefits are also taking longer than expected.
Adding to this is clarity over what AI will deliver. Even large organisations struggle to set KPIs for AI or have any realistic ROI measurement. For SMEs with far fewer technology skills, that problem is exacerbated. It may well explain the lack of progress or perceived results.
Another fear this report highlights is AI’s impact on jobs and security. 61% say that AI is moving faster than the business can protect against threats. They stopped short of saying AI itself is a threat, but there is concern about unintended consequences. There is also the inevitable concern over job losses, with 25% of IT admins worried about AI’s impact on their jobs.
Organisations need to address that latter point positively. AI is an ideal tool for dealing with mundane and repetitive tasks. That makes it a tool to augment rather than replace staff.
Enterprise Times: What does this mean?
SMEs struggle to compete for IT staff across all disciplines. Skills shortages drive up staffing costs, while investment in training can often see staff leave for higher-paid jobs elsewhere. This makes dealing with an ever-changing IT landscape complex.
Enter the MSP. They are finding a willing and eager market among SMEs, but not one that will roll over. SMEs see the MSP as a partner but still expect to sweat them as they would sweat any other asset. Shadow IT must be dealt with, and when IT has other priorities, this could be offloaded to MSPs.
The biggest message here is that nothing is unsolvable. From adding AI to taking control of security, SMEs are in a better place than ever. The challenge now is continuing that momentum.
