The Hindu Business Line : IT spend by small, medium cos set to rise 22%: Study

Small and medium businesses (SMBs) in India are expected to spend $9.7 billion on IT in 2008. This would be an increase of 22 per cent over their IT spend in 2007, according to the New York-based Access Markets International (AMI) Partners, Inc.

The expected growth in IT spend by Indian SMBs in 2008 will be fuelled by a boom in the overall economy and a rise in the number of small businesses, a study by AMI Partners has concluded.

More than 80 per cent of SMBs are confident of posting revenue growth in 2008 over last year, thanks to buoyant growth in the Indian economy and progressive moves towards integrating India with the global economy.

As the quantum of IT spend among SMBs rises, there has been a marked change in the perception of IT as a support function to that as an enabler of competitive advantage.

While a significant number of small businesses are still at a basic hardware usage level, some of them are reaching out to higher levels in the maturity chain. Also, SMBs are increasingly expecting higher returns on their IT investments.

Shift seen

In the days ahead, the demand for IT among SMBs is expected to witness a shift from being hardware-driven to being solution-oriented.

This, in turn, will provide a fillip to IT services. In 2007, about 12 per cent of SMBs’ IT spend was on services and support services.

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