Nearly half of small businesses are turning to virtualisation technology to help them cut IT costs during the downturn, according to research conducted by Star.

The survey found that 43% of respondents saw the technique - which allows users to share software across hardware resources - as the main technology in the battle to keep costs under control.

"One of the biggest challenges facing small businesses today is access to finance so, as the economic slowdown continues, the number one priority is to do more with less," said Ben White, chief executive of Star, the business ISP.

"Virtualisation helps achieve those business needs so it is not surprising that respondents see it as a key technology to help 'crunch-proof' their businesses."

Other technical developments that are helping small businesses reduce their spend on IT were a converged approach to technology (21%), greater availability of broadband services (17%) and emerging Web 2.0 technologies (10%).

The main driver when making a decision on what to invest in was the need to solve real business challenges (43%), the ability to deliver proven business benefits (25%) and working with a trusted partner. Just 4% said brand reputation was a top consideration.

The research also suggested the ongoing IT skill shortage was proving a challenge at the smaller end of the market, with almost a third (26%) stating that the biggest barrier to online growth was a shortage of people with the knowledge and experience to implement new technologies.

The survey was conducted at ‘The Road Ahead', an event organised by Star, that brought 200 small and medium-sized businesses together with leading technology vendors, including Star, Microsoft, Juniper, VMware and BT.