Four out of every five small companies are not getting effective support from their IT service providers and some 79 per cent believe new software releases are not much different to older ones, a survey has found.

The survey, conducted by the Small Firms Association (SFA), also found that half the companies surveyed had spent more than €6,000 on "major" technology upgrades within the previous nine months.

Some 62 per cent of small companies had major system upgrades last year, but almost one in four of those firms said the only impact was an increase in their IT budget.

Seven out of 10 firms said the IT industry had "overhyped" their products and services and that the language used was confusing and unnecessary.

But the SFA - which was highly critical of Microsoft's new software assurance scheme last year - has shifted position in the licensing debate.

Mr Pat Delaney, chairman of the SFA, said this week that Microsoft was taking advantage of its strong market presence to keep out competitors.

But he added that, if the company could deliver a better level of service for its customers, the new scheme could reduce costs for small businesses in the long run.