LONDON, October 20, 2005 - Europe's 19 million Small and Medium-sized Businesses (SMBs) are increasingly seeing key business-enhancing technologies as the way to beat the competition, says a new report commissioned by Cisco Systems.

According to the 12-country study, more than half of SMBs view their competition as the primary business challenge and the catalyst for investment in advanced technologies. Faster broadband Internet access, security, wireless and mobility solutions and IP telephony were identified as 'must have' technologies for the next three years. Technologies including videoconferencing (16 percent) and mobile 'smart phones' (20 percent), however, are considered as 'nice to haves' over the next year, although growth in demand is expected over the next three years.

The demand for broadband services is clearly illustrated by the fact that more than 80 percent - or 15 million businesses - now and over the next three years see higher-speed Internet connection as mandatory for their businesses. This figure rises to 94 percent in the EU Accession countries.

In step with larger enterprises, technologies that improve productivity of mobile workers are seen as increasingly desirable across Europe, with 60 percent of businesses, rising to 70 percent in Italy and 77 percent in Denmark, citing remote access to the company network as their 'must have' technology. SMBs also recognise that a successful business is a secure business, with more than three quarters of companies highlighting the security of their network as vital for their success.

The survey, conducted by independent research house Coleman Parkes, also found that a quarter of European SMBs already fully understand the value IP telephony will bring to their business, with a further 37 percent showing a moderate level of awareness. Interestingly, the EU accession countries demonstrate greater awareness of IP telephony than Northern or Western Europe. In terms of actual take-up, this technology is set for significant growth with 23 percent - or 4.5 million companies - recognising the value to their business now, rising to 35 percent - 6.5 million companies - in three year's time.

"The findings from this report show the increased competition in the marketplace for Europe's Small and Medium businesses (SMBs). Technology, in their view, will help them address this challenge by increasing their competitive advantage, reducing cost and gaining productivity, and therefore stay ahead of the competition" said Edzard Overbeek, Vice President, Commercial, European Markets, Cisco Systems.

While it seems that SMBs recognise the competitive business advantages of adopting new technology, the study also delivered some worrying statistics on disaster recovery and storage. While the majority of companies recognise that data back up and storage are mandatory requirements for their businesses, more than a quarter representing 5.3 million businesses - do not consider this important and are still leaving themselves open to the risk of irrecoverable losses caused by security breaches or system failures.

Additional findings include:

• Nearly half (46 percent) of European SMBs said that keeping up to date with market issues and developments was a key business challenge
• Meeting legislation and regulation continues to be an issue for European businesses - with 41 percent of SMBs stating it was one of their key business challenges
• "More than three-quarters of companies fund their IT investments in cash. Leasing is the second most popular method of funding in all regions at 31 percent. Credit was only used in five percent of cases
• 47 percent of SMBs in Northern Europe see the difficulties of integrating new technology into the business as a barrier to adoption, compared with only 23 percent in EU Accession countries and 36 percent in Western Europe
• 72 percent of all SMBs (82 percent in Northern Europe) agree that some products aimed at the market can be too complex

Mr Overbeek added: "Responding to the barriers to technology adoption within the large and diverse SMB market, such as cost and complexity, is an ongoing focus for Cisco and we strive to continue to deliver affordable and intuitive solutions specific to their individual needs. Last month's launch of the Cisco Business Communications Solution, featuring a tailored family of smart, simple and secure products, as well as financial services and support, is evidence of this focus."