Techaisle Blog

SMB buyers are acutely aware of the threat cyber attacks pose to their businesses. The Techaisle SMB and Midmarket Security Adoption Trends survey of 2,035 IT and business decision-makers from SMB and upper midmarket firms found that nearly 30% of SMBs (1-999 employees) consider cyber attacks to be among the top three issues facing their business, with an additional 26% stating that it is the most pressing/critical IT issue facing their firms. However, less than half of the respondents were more optimistic, choosing one of three responses: “it is a critical issue, but we have established best practices to control cyber attacks,” “it is one of many different issues, and we are satisfied with our status,” or “cyber attacks are not a significant issue.”

Drilling down, we see that small businesses (1-99 employees) are less inclined to see cyber threats as a top-one IT issue or a top-three business issue; this likely arises from the fact that SMBs have less mature IT operations (meaning that many factors that are controlled in larger firms could represent top IT issues) and that they face a wide array of daily business challenges. The data showing that small businesses are likelier to have established best practices to control cyber attacks probably isn’t grounded in market reality: small businesses that handle security internally lack the resources needed to deploy optimal defenses.

However, those relying on a capable third party may reasonably claim to use best practices. Most worrying from this data, though, are the top two bars, indicating that 22% see cybersecurity as “one of many issues, and we are satisfied with our status,” with another 12% claiming that “cyber-attacks are not a significant issue.” There are small businesses – for example, individuals billing larger businesses for hourly labor – for whom cyber attacks wouldn’t represent a critical issue. However, the data shows that one-third of small businesses are unconcerned about cybersecurity. In contrast, independent studies show that most small businesses fail within six months of being breached. Techaisle thinks these businesses likely struggle to find financial justification for investments in meaningful cyber defense and instead persuade themselves that this is not a real business problem for them. Techaisle suspects that many of these firms are tuned into vulnerabilities associated with digital business practices and might be persuadable concerning the value of cybersecurity if issues and remedies were clearly and convincingly presented to them.

Core midmarket (100-999 employees) and upper midmarket (1000-4999 employees) businesses take a more proactive view of these issues. Approximately two-thirds of respondents in each group view cyber attacks as either their most critical IT issue or a top-three business issue, with the core midmarket group evenly split between these positions and the upper midmarket more likely to identify cyber as a top IT concern. More than 80% of these organizations are focused on establishing effective cyber defenses and should be viewed as prime candidates for effective solutions.

Should SMBs worry about cyber attacks?

The data above begs a related question: Is the lack of concern demonstrated by small businesses rooted in reality – is it the case that one-third of respondents don’t have much to fear from cyber-attacks?

According to recent survey data from Techaisle, the use of Generative-AI is rapidly increasing within SMBs and midmarket firms. The survey found that AI has become a priority for 53% of small businesses, up from 41% in April 2023. Among core-midmarket firms, 87% prioritize AI, up from 75% in April 2023. Similarly, 89% of upper-midmarket firms prioritize AI, compared to 87% in April 2023. Overall, 60% of SMBs and 84% of midmarket firms are either using or planning to use Generative-AI within the next six months.

The survey also found that between 40% and 45% of midmarket firms have developers and architects specializing in AI/ML, DevOps, hybrid cloud, and app modernization. Additionally, between 35% and 45% of these firms plan to increase their investments in Edge computing, Containers, Open-source technologies, app development, and analytics. Most notably, 72% of midmarket firms are increasing their in-house hiring for Generative-AI.

A global research study of 6,240 SMBs and midmarket firms found that IT security is a top priority for these organizations. 85% of SMBs and 100% of midmarket firms ranked IT security as a top priority, and 61% of these firms are increasing their IT security spending by more than 8%, a higher percentage than overall IT spending. The study also revealed that 56% of SMBs and 88% of upper midmarket firms experienced at least one cyberattack in the past year. As a result, preventing cyberattacks is a priority for 64% of firms.

According to the Techaisle survey, cybersecurity breaches can be costly for SMBs (1-999 employees), with an average loss of US$1.2 million in data, productivity, compliance and regulatory expenses, and staffing costs. Upper-midmarket firms (1000-4999 employees) suffer even more significant losses, with an average cost of US$28.6 million per breach.

According to a survey of 2035 businesses conducted by Techaisle, cybersecurity breaches cost SMBs (1-999 employees) an average of US$1.2 million in data, productivity, compliance and regulatory expenses, and staffing costs. In contrast, upper-midmarket firms (1000-4999 employees) suffered an average loss of US$28.6 million. The research also revealed that 56% of SMBs and 88% of upper midmarket firms experienced at least one cyberattack in the past year.

SMBs and midmarket firms recognize that a security breach can have significant business implications. When asked about the potential impact of a breach, 54% of firms stated that it would damage their customers’ privacy, 49% believed it would erode customer trust in their business, and 44% saw it as damaging to their company’s reputation. Nearly one-quarter reported that a breach would have a substantial negative impact on their bottom line. Security is not just an issue but also a critical factor in defending against threats to trust, compliance, and financial viability.

Security is a critical concern for SMBs and midmarket firms. While technology is essential for productivity, growth, and profitability, it also exposes businesses to potentially devastating security breaches. Many SMB firms practice “security through obscurity,” hoping that attacks will target larger organizations while they keep a low profile. However, with enough hackers, scammers, and cybercriminals to go around, every conscientious SMB executive must address security threats and take action to safeguard their business against other threats, such as loss of customer trust, compliance with laws and regulations, and loss of financial solvency.

Techaisle survey indicates that SMBs have IT security on their agendas, with 85% of SMBs and 100% of upper midmarket firms considering it a critical concern. A closer look at the findings shows that other important issues for SMBs, such as cloud and hybrid work, cannot be implemented without an effective security approach.