Technology outsourcing is too expensive for most small and medium-sized businesses (SMBs), according to analyst Datamonitor.

Only a quarter of the 500 SMBs surveyed had invested in outsourcing deals, and 60 per cent said they could not imagine their IT services ever being handled by an out-of-house company.

Nearly a fifth (17 per cent) did not even know that it was possible to outsource IT management.

Cost and loss of control are the key factors discouraging outsourcing projects, said Datamonitor analyst Aphrodite Brinsmead.

'The issue of cost is understandable for smaller businesses as they have tight budgets and may be less aware of how outsourcing can help improve their profitability,' said Brinsmead.

'The fact that some businesses are unaware of their outsourcing options may stem from vendors having previously overlooked the SMB space,' she said.

Security and email management were the most popular areas for SMBs that are investing in outsourcing.