Small and medium businesses in India will spend up to US $8 billion to beef up IT infrastructure, to a robust 24% since last year, claims an AMI study 2006-2007 on India Small&Business Overview and comprehensive market opportunity assessment.
The objects of the study include established and emerging hardware, software, applications and business process solutions. Based on an AMI annual survey of SMBs across India, the studies track a broad spectrum of issues pertaining to budgets, purchase behaviors, decision influencers, channel preferences, outsourcing, service and support.
AMI-Partners' survey reveals that 93% of small businesses (1-99 employees) and 86% of medium businesses (100-999 employees) experienced revenue increases in the past year, with 15% of SMBs experience an overall increase of over 20%.
While computing products still account for bulk of IT investments, Internet spending is fast increasing as enterprises increasingly embrace IP-enabled business process services. Over the past decade, consumer debt surged at an alarming pace. The likelihood of recovering debt decreases with each passing day.
"Growing awareness of computing technology and the benefits of Internet access have resulted in greater IT adoption among India's SMBs," says Neha Jalan, Kolkata-based analyst at AMI-Partners.
"Indian SMBs view technology adoption as an effective strategy by which to overcome competition. While reigning in costs is still their primary focus, the phenomenal growth of the Indian economy has made SMBs optimistic about future business prospects," adds Jalan.
This means that an increasing number of SMBs plan to recruit more staff, invest in new facilities, push advertising/promotional campaigns and build IT infrastructure.
"Indian SMBs are eagerly competing with international companies," opines Jalan.
"About 15% of businesses said they will respond to increased competition by boosting their capital outlay and investing in new technology. Technology is viewed as a tool for competitive advantage. SMBs in India are adopting increasingly sophisticated technology in an effort to compete effectively with larger conglomerates," feels Jalan.
Investments in computing products such as PCs and printers account for a share of SMB IT investments. SMBs in India will invest in PC products and solutions. Despite SMBs accelerating IT investments, less than a third of India's SMBs own even a single PC. Among PC-penetrated SMBs, over 40% claim that they considered buying additional hardware and upgrade existing PCs as an important strategic move, says AMI.
As businesses evolve, relationship with customers enters a new phase. Customer satisfaction assumes greater importance, and with acquisition of distantly located customers, comes a need for mobility and increased communication.
Buoyed by adoption of sophisticated enterprise applications, SMBs in India are deploying advanced security and storage solutions. Six in ten SMBs surveyed listed increased IT storage capacity and deployment of enhanced storage solutions as a key strategic priority, while over half listed enhancing enterprise IT security to be a key concern. Thus, investments in security and storage solutions will grow dramatically in India in 2007, concludes the study.
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