Cyberattacks are increasingly targeting UK SMEs, with 44% reporting they've been victims of such incidents. Alarmingly, nearly 60% of UK SMEs have faced multiple attacks in 2024. As a result, security is now the top concern for 61% of UK respondents, up 10% from the last report. Additionally, 25% of all cybersecurity incidents were attributed to AI-generated attacks, and SME IT teams are more worried about their security posture than they were six months ago.

The seventh edition of JumpCloud's biannual SME IT Trends Report provides valuable insights into the current state of IT and future directions, based on a survey of over 600 respondents from the UK and USA, including 311 from the UK.

Shadow IT and Admin Control Concerns

The survey also highlighted growing anxiety over shadow IT among UK SMEs, with 85% of IT professionals expressing concerns about applications and resources managed outside of IT oversight. When asked why they couldn't address shadow IT, 37% cited more pressing priorities, and 31% admitted they lacked the ability to discover all applications.

UK small to medium-sized enterprises are grappling with multiple challenges: the rising threat of shadow IT and AI, security vulnerabilities, managing a complex IT environment, and the looming UK General Election. Nearly half (49%) of the UK respondents admitted that the elections add an extra layer of uncertainty to their organisation’s future success.

Greg Keller, co-founder and CTO of JumpCloud said: “UK SMEs are grappling with subdued economic conditions combined with an increasingly complex environment. It is clear that security, AI, shadow IT and tool sprawl are considerable challenges. And we’ve yet to determine the knock-on impact of the UK elections. To keep their environment secure while grasping the opportunity that AI creates, IT admins need to consolidate tool sprawl and gain control of shadow IT. Eight out of 10 said they wanted a single centralised solution rather than many point solutions.”

Improving investment picture

Despite facing uncertainty, UK SMEs are showing optimism, especially regarding investments. Reports of budget increases have risen slightly from 72% in Q1 2024 to 76% in Q3 2024. Furthermore, 17% of respondents expect budgets to rise by over 20% in Q3 2024, up from 13% in the first quarter, while 33% anticipate increases between 10%-20%, compared to 26% in the previous report.

Embracing AI and the Need for Centralisation

UK businesses are increasingly recognising the potential of AI. Adoption is accelerating, with 34% of UK respondents planning to implement AI in the next six months, up from 19% in the last survey. The proportion of respondents with no AI implementation plans dropped significantly from 23% to 9%. Additionally, 75% view AI as a net positive, up from 71% in Q1 2024.

However, the IT landscape's complexity is growing. The number of tools used to manage the employee lifecycle is increasing, with 46% of respondents managing between five to 10 tools, up from 32% in Q1 2024. Additionally, 17% are now managing between 11 and 15 tools, a significant rise from 6% in the last report.

Tool sprawl is becoming a major challenge, with 81% of respondents preferring a single centralised solution for identity, access, and security, up from 66% previously.

Key Findings:

• Shadow IT and Phishing: Phishing is the main cause of cyberattacks (43%), followed by shadow IT (33%). Nearly half of the respondents lack the resources to defend against these attacks.
• Top Challenges: Besides security, the increased cost of remote work (42%) and the rollout of new services and applications (41%) are significant challenges.
• Financial Preparedness: The number of respondents who feel financially prepared to handle an attack has increased from 65% in Q1 to 73% in Q3. Investment in expert IT security staff has also risen slightly.
• Biometrics on the Rise: The use of biometrics for employee authentication has surged from 44% to 68%, reducing the need for password management.
• Growing Reliance on MSPs: SMEs are increasingly partnering with MSPs for IT support, with usage rising from 39% to 51%. Two-thirds plan to increase their investment in MSPs over the next 12 months.
• Security Concerns: Despite this, 37% of respondents remain concerned about how MSPs manage security.