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This IDC update examines a number of new small and medium-sized business (SMB) software-as-a-service (SaaS) and cloud-based solutions in areas including backup and recovery, security, hosted email, and unified communications. IDC's recently completed survey of U.S. SMBs indicates that although interest in online resources is increasing, spending on core on-premises IT will have a higher priority during the next 12 months. That noted, the most technologically forward-thinking SMBs (which also happen to have the highest annual IT spend on average) continue to be the most active users of SaaS and cloud solutions, and these "SMB 2.0s" also cite the highest levels of interest in consuming such services in the future. Several factors are driving higher levels of SaaS adoption among SMB 2.0s (especially midsize ones) including continuing economic pressures, greater education about SaaS and cloud technology, and an expanding array of services offered by a growing variety of providers. Highlighted are: