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Investing.com -- Small and mid-sized businesses expect technology budgets to grow faster than overall costs and revenue in the next two years, according to KeyBanc’s latest SMB Tech Spend survey, even as business conditions show signs of strain.
Surveyed companies forecast IT budgets to expand 4.3% in 2025 and accelerate to 5.2% in 2026, outpacing expected operating cost growth of 7% and 7.6% in those years.
Revenue growth, however, is projected to slow to 10.5% in 2025 before rebounding slightly in 2026, with respondents citing a tougher operating backdrop.
Generative AI adoption is gaining traction, with nearly 80% of respondents saying they have enough in-house expertise to deploy it and two-thirds planning to integrate it into operations.
Customer service and sales are seen as the top areas for AI deployment, with efficiency and cost savings the main expected benefits.
Back-office software such as accounting, invoicing and expense management remains the top budget priority, while CRM and search engine optimization are climbing the list for 2026.
Among vendors, Microsoft gained share in cloud and security, Intuit benefited from rising AI readiness, and HubSpot and Monday.com posted gains in social media management and collaboration tools.
Zoom saw declines in usage for video conferencing and unified communications.
Despite stronger AI appetite, SMB health indicators softened. Confidence in financial stability declined compared to earlier in the year, and expectations for revenue growth stepped down.
Still, access to credit has improved and nearly half of respondents said tariffs were pushing IT budgets higher.