More Indian SMEs Riding On SMAC, Says Study

by CXOtoday News Desk    Jan 29, 2015


SMEs in India, just like their larger counterparts, are increasingly focusing on emerging technologies for growth such as social, mobile, analytics and cloud (SMAC). A new report from market research firm Zinnov says small and medium businesses present a lucrative opportunity of $11.6 billion in 2015 and $25.8 billion in 2020.

The report that appeared first in ET, defines an SMB as a company with up to 1,000 employees and says that India has nearly 51 million such businesses, of which 12 million have a high degree of technology influence and are looking to adopt newer IT products.

These companies, according to the study, will be spending on IT products that include mobility, analytics, social media and cloud in order to increase their customer reach, manage customer relationships better, and ensure efficiency in operations.

Zinnov has further said while there is immense opportunity for large IT vendors to tap this segment, they may have to fine-tune their approach towards SMBs as their needs are very different from the bigger players.

“Vendors need to change their business models in order to target SMBs as their requirements are very different from those of a large enterprise,” said Arvind Rawat, engagement manager at engagement manager at Zinnov, adding that SMBs cannot afford expensive software and therefore companies need to offer their products in a cloud-based freemium model.

It is a model, where customers get basic software for free and pay for higher features. According to the report, SMBs require solutions that work equally well on mobile and are available in a pay-per-use model.

The report notes that vendors such as Google and Microsoft are putting a special focus on this segment through massive price cuts and newer business models to suit this market. Google, for example, reduced the cost of Google Apps by 45% in 2013, bringing the cost to just Rs 150 per user per month. Microsoft similarly cut prices for Office Mobile by 31% in 2014, making its base version available for free, says the report.

Adoption of IT across customers and push from ecosystem stakeholders is fuelling the demand from SMBs in India, the report said. Mobile app downloads in India will grow from 100 million in 2014 to 400 million by 2020, the research firm said.

“With growing mobile adoption, mobile app development is becoming increasingly viable for SMBs, as Rawat informs there are over 9,000 mobile app development companies in India alone.

According to Zinnov, as SMEs are ready to ride the SMAC wave, the four key points that technology providers need to bear in mind while addressing this segment include: 1. Product Localization is necessary for growing in emerging markets, 2. Unique support models are needed to showcase value and reduce the overall solution cost 3. Need for customized pricing strategies targeted at driving adoption of solutions and 4. Solutions that understand local workflows and can offer a bouquet of services under the same umbrella.