SMBs In Retail To Spend US$11.6B On IT

by CXOtoday Staff    Mar 22, 2007

An AMI study titled ‘The Global Forecast Model’ provides a detailed picture of IT adoption and spending patterns in the SMB space across 66 different IT technology sub-categories and 14 Asia/Pacific countries, with roll-ups for regional views.

The most striking feature of the study reveals that small and medium businesses (with 1-999 employees) in the retail vertical across the Asia-Pacific region outside Japan are on track to spend a whopping US$11.6 billion on IT-related investments in this year.

Computing including PC and server hardware - and IT Services will be top drivers of retail SMB spending in 2007, claims the latest study by Access Markets International (AMI) Partners Inc.

The key countries in the region that drive retail SMB IT spending this year include Australia, China, India, South Korea and Taiwan.

“While retail SMB IT spending in emerging markets such as India, Indonesia, Philippines and Vietnam are set to grow more than 15% year-on-year in 2007, spending in mature markets such as Australia and Singapore will grow less than 10% in 2007 over 2006,” says Nishant Dave, AMI’s Singapore-based Research Director for the Asia-Pacific.

An IT revolution in the retail SMB segment is taking place at two levels in the region on the one hand, retail small businesses (with 1-99 employees) have been investing aggressively in basic computing infrastructure. On the other hand, retail medium businesses (with 100-999 employees) are looking closely at services delivery platforms to enhance competitive edge.

Nearly 150,000 new retail SMBs in the Asia-Pacific region are planning to invest in basic PC infrastructure in 2007 as a means to better manage business decisions by using simple productivity tools. Also many of the current and new retail SMBs are looking at connecting to the Internet through broadband.

“Both types of companies will face the disruptive threat to their business models from larger retailers which will compel them to re-invent themselves using IT as a competitive differentiator,” adds Dave.

Nearly 150,000 new retail SMBs in the Asia-Pacific region are planning to invest in basic PC infrastructure in 2007 as a means to better manage business decisions by using simple productivity tools. Also many of the current and new retail SMBs are looking at connecting to the Internet through broadband. The retail mid-market landscape in the region, though fragmented, has one common issue to deal with: how to redesign business practices in order to face consumer demand.

IT managers in these companies are looking at primary business challenges and seeking out IT infrastructure and services to help address these issues. IT spending in China and India is expected to grow double-digit year-on-year in 2007. Storage and security are expected to be the fastest growing IT spending categories among retail mid-market companies in the region - growing more than 20% year-on-year in 2007.

Although CRM and ERP/SCM spending in the retail mid-market segment is expected to grow less than 10% in 2007, CRM as SaaS (software as a service) is expected to increase two to three times growth of traditional application delivery platforms.