The Hindu Business Line : Small enterprises' IT spend to rise 21% CAGR: IDC

INDIAN small and medium business companies (SMBs) are set to emerge as the fastest growing customers for Information Technology (IT) in the Asia Pacific region, according to International Data Corporation (IDC).

The Indian SMB industry's spending on IT is expected to grow 21 per cent compounded annually during 2004-08. Chinese SMB IT spending would rise 18 per cent during the same period, IDC says in a new report released on Monday.

According to the `Asia-Pacific small and Medium-sized business IT spending forecast, 2004-08' the total IT market in the region, excluding Japan, is expected to be $29.7 billion in 2004, a growth of 12 per cent over last year.

``Hardware will continue to be the mainstream expenditure item on SMBs' purchase list during 2004. However, looking beyond 2004, expenditure on IT services is expected to surpass hardware and software expenditure, with a projected 15 per cent compound annual growth rate (CAGR) from 2003 to 2008,'' a senior IDC analyst was quoted as saying on the company's Web site.

As technology rapidly advances and IT budgets become increasingly tight, IT managers are beginning to place a higher emphasis on optimising and consolidating resources, as well as simplifying business processes and operations.

Consequently, IDC anticipates a growing demand for specific technologies that will help to achieve these objectives, the release said.

Meanwhile, in an earlier press release, IDC had said that the personal computer (PC) market in the region had grown 16 per cent to touch 7.5 million units in the January-March quarter of 2004.

Although IDC did not provide India-specific figures, it commented that the market had posted a "solid performance" due to seasonal Government buying that did not get hampered by the ongoing general elections.

As India follows an April-March financial year, purchasing peaks during the January-March period.

``Recent IT tax breaks in India also created confusion and supply chain issues at the beginning of the quarter could have affected sales but the industry sorted out these issues quickly in the following months allowing a minor positive impact on PC sales in the SMB space,'' it said.