SMBs to Spend Big Time On IT: AMI

by CXOtoday Staff    Sep 06, 2006

A latest study by AMI Partners has revealed that this year Indian SMBs will spend nearly $576 million on packaged software. Of this spend, operating systems, databases and utilities software will account for almost 70% of the overall packaged software spending.

The boosted (25% growth) spends are attributed to several factors. Having identified the business potential and needs of the segment, vendors are increasingly offering SMB-specific solutions.

There are certain verticals like manufacturing, retail, BPO and ITO services, which readily take to these solutions. Amidst the next wave of IT adoption, SMBs (1-999 employees) realize that any lag in their IT infrastructure could cost them a fortune. Virtualization is another stimulant. Security and infrastructure development are also witnessing an increased emphasis.

Marketing strategies are also witnessing a set pattern. “As most of the purchases will happen via channels, IT vendors are increasingly marketing their products through them. Channels provide both the market reach and the customer knowledge. As India SMBs are spread across several clusters through out the country, the reach of channels becomes a crucial factor,” informed Nirupam Chaudhuri, Kolkata-based Research Manager at AMI-Partners.

Factors like a global slowdown in IT spends, India’s own IT maturity and the strengthening rupee have given the country’s tech sector a shot in the arm.

Other trends include a growing demand for micro-vertical specific solutions and a preference for a full bouquet of solutions with services part of the SLA, rather than discrete pieces of software and hardware.