Indian SMB IT spending shows 8% growth QOQ

AMI Partners report shows Indian SMB IT spending will cross US$4.49 billion in 1Q 2010. New customer acquisition is prime driver of SMB IT spending.

According to a recent report by New York-based IT research firm Access Markets International (AMI) Partners, Inc, the Indian SMB (small and medium business or companies with up to 999 employees) segment shows a sign of revival, as it's set to spend US$4.49 billion on ICT in the first quarter of 2010. As compared to the previous quarter, the percentage of IT spending has increased by 7-8%. "This shows healthy prospects and the industry's positive outlook," says Rati Ghose, the senior manager for market insights at AMI-Partners.
As per the study, there is a significant increase in investments for

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new customer acquisition among verticals such as transportation, construction, healthcare and FIRE (banking and financial services, insurance and real estate). In the retail sector, over one fifth of the Indian SMB respondents mentioned data management as another key focus area for technology adoption.

"With limited spending resources due to recent economic conditions, it has become even more important to see where the pain areas of these verticals lie," says Ghose. For instance, the FIRE sector today accounts for about 6% of the Indian SMB segment, and close to 10% of IT/telecom spending. Other than the large enterprises that have always been at the helm of technology adoption, Indian SMBs in this segment are continuously coming up with innovative product portfolios, and intend to move to the next wave of IT adoption.

The key IT spends drivers for this segment include capabilities to offer value-added services to clients, gaining a competitive edge, excellent connectivity, and access to information. Security is another thrust area for them. Some of the key security requirements on this front for these companies include enhancing IT security and privacy via firewall, encryption, and antivirus. Around 73% of FIRE SMBs are spending in these solutions. "Other areas of interest are line of business software to improve daily operations, increase in efficiency, and reduction of dependence on manual intervention. In the last six months, 79% of FIRE SMBs have invested in business intelligence, data mining and analytics solutions," says Ghose.

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