The Hindu Business Line : `IT spend by medium-sized businesses up by 15 pc'

DRIVEN by faster adoption of connectivity, computing and productivity solutions, medium-sized businesses (MSBs) in India spent over $2.9 billion on IT products and services in 2004, according to Access Markets International (AMI) Partners Inc of New York.

According to a study conducted by the consultancy firm that focuses on small and medium businesses, the spending on IT by MSBs registered a 15 per cent rise over the previous year. During the year, these companies hired employees, opened more sites, adopted new and advanced IT products and solutions, encompassed virtual private networks and worked on customer-focused enterprise applications.

The study states that the outlook for 2005 remains "robust" with the industry segment expected to hire six lakh new employees with around 13,000 new MSB site openings. At present, there are over 46,000 MSBs in India, each with between 100 and 999 employees. The aggregate turnover generated by these companies has been pegged at $625 billion, including cross transactions with other small, medium and large businesses.

The study has concluded that 54 per cent of MSBs in India plan to expand their workforce in the next 12 months. More than two-thirds of these have multiple sites and 19 per cent plan to open new sites or branches. In the last 12 months, more than 50 per cent of these businesses registered an increase in annual revenues, with one-third recording an annualised revenue growth in excess of 10 per cent.

Pointing out that Indian MSBs were largely metro-centric, about 26 per cent of them were located in Tier 2 and Tier 3 towns and cities.

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