Most SMBs are expected to increase their technology spending in 2010, even though they are concerned about the business climate, according to second annual Microsoft SMB/Partner Insight Report.

The report found that SMBs will invest in IT that directly benefits their bottom line, either by reducing operating costs, improving employee productivity, or acquiring and retaining customers.

The study, based on a survey of Microsoft Small Business Specialist partners, showed that 63% of respondents predict their SMB customers to spend more on IT in 2010, up from 25% in 2009, with overall SMB IT spending anticipated to rise by an average of 16% over 2009 levels.

Results from more than 500 partners in the US, the UK, Canada, Brazil and India indicate that SMBs view virtualisation, IT consolidation, software as a service, customer relationship management (CRM), and support of remote workers as their most important technology investments, Microsoft said.

According to the report, 51% of SMBs view server virtualisation or IT consolidation as the best cost-saving technology, while small business specialists expect to see a 19% increase in small and midsize customers using cloud offerings in some form.

In addition, 74% of those surveyed believe their customers will have more remote workers, up from 54% in 2009; the estimated 19% average increase in remote work force is expected to drive demand for mobile offerings.

Birger Steen, vice president of small and medium business & distribution for the worldwide small and midmarket solutions & partners group at Microsoft, said: The most competitive SMBs are investing in IT that will not only help protect and strengthen their business, but prepare them for success when economic conditions improve.

“Technology can buoy smaller businesses through turbulent times – and which technologies SMBs choose can help determine the speed of their return to financial stability.