The Hindu Business Line : Small, medium biz spend on IT may rise 25%

Small and medium businesses in India, employing less than 1,000, are likely to invest about $640 million on packaged software in the current calendar year. This would mark an increase of over 25 per cent on similar investments made in 2006, according to a study conducted by the New York-based Access Markets International (AMI) Partners, Inc.

The study states that, over 90 per cent of the total software spending by SMBs this year would be on databases, accounting, networking, productivity and systems software. Increased IT awareness among SMBs is expected to provide a boost to the Indian IT market.

IT Solutions

SMBs are now aware of how deployment of IT can accelerate their businesses. In fact, a small percentage of IT-savvy SMBs have progressed to the third wave of IT adoption, demanding tailor-made IT solutions and superior support services.

In 2006, small businesses (SBs) – or companies with less than 100 employees — registered a 23 per cent rise in software spending while medium businesses — or companies with 100 to 999 employees — posted a 30 per cent growth on the same count.

Channels continued to dominate the Indian distribution ecosystem even as users continued to be influenced by the way independent software vendors and systems integrators counselled buyers on typical deals for solution pieces, support infrastructure and technology lines.

Recent Advances

The study states that investments made by SMBs in packaged software are generally driven by business needs even as specific requirements determine the modules or packages that are chosen for implementation. Rationalisation of such investments has also emerged as a focus area for SMBs.

It is found that the top management in SMBs want a snapshot of all processes in the company in real time. There is an increased focus on factors such as employee productivity, enhancement of customer interaction systems, automating and streamlining operations, round-the-clock connectivity, information protection, etc.

The study states that these factors, in turn, are driving adoption of appropriate packaged software and solutions.

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