BackWeb Special | Indian SMB market at 35 million units: study
Web Special | Indian SMB market at 35 million units: study
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New Delhi: Easy and affordable technology is driving the overall technology adoption process within the small and medium business (SMB) sector. This is evident from the fact that India already has 5000 IT/ITeS companies with 100% PC penetration. Contributing to this trend is the growing internet penetration with a CAGR of 46% in the last seven years.
A recent study on “IT opportunity in the Indian SMB sector", by Zinnov Management Consulting reveals that the Indian SMB market today stands at 35 million units, with retail contributing 52% ( at 15 to 18 mn units). Spend on IT in ‘07-08 by SMBs was $6.6 billion, which is around 30% of the total IT spend in India.
The report defines “SMBs" as organizations having a minimum employee strength of 999, essentially in three key categories namely retail, manufacturing and services. The services sector contributes 9.5 million units followed by manufacturing which ptiches in with about 7.3 million units.
Technology enablers
Special packages offered by leading IT companies include IBM’s Express Advantage product portfolio, that offers complete solutions from IBM’s Software, Systems and Technology, and Services groups. This addresses security, business recovery, employee collaboration and energy efficiency needs of mid-sized businesses. It recently rolled out the BladeCenter S, which aims to reduce the 25 to 45 servers used by an average mid-sized company by up to 80%, eliminating the need for the SMEs to own and operate data centres.
Cisco’s Unified Communications 500 Series for Small Business is a unified communications solution for small businesses that provides voice, data, voicemail and WebEx Automated Attendant, video, security, and wireless capabilities while integrating with existing desktop applications such as calendar, e-mail, and customer relationship management (CRM) programs. Cisco recently launched a Smart Care Service designed to help SMBs in India to simplify network maintenance.
Cisco India’s ‘Network On Wheels’ (NOW), is a mobile showcase of customized networking solutions that include advanced technologies such as Security, Wireless and Unified IP Communications
Microsoft offers the SMB community a set of products that have been specially designed for them -- the Small Business Server 2003, Microsoft Dynamics NAV and Microsoft’s ERP offering. It also has a dedicated website like Merabusiness.com through which allows users to interacts with a host of businesses on relevant products for the SMB community, information on updates and investments.
TCS offers end-to-end ICT services including hardware, networks, applications, maintenance, enhancements and support. This is additionally supported by business and technology consulting as well as business process outsourcing. The entire proposition is designed to fundamentally alter the technology consumption model by making it risk free, easy to adopt, affordable, and avoid the need for SMBs to hire and retain expensive IT resources.
India, China, Korea and ASEAN region are fastest growing SMB markets
Zinnov chief executive Pari Natarajan cites greater employee mobility, increased competition and expansion in terms of office locations as some of the reasons encouraging SMBs in India to embrace IT and the Internet.
“Government today has realized the potential of this growing segment. Most of the big players, irrespective of the vertical they belong to, are looking at this market and are formulating strategies to tap it, he adds.
For IT giants like IBM, India, China, ASEAN (especially Vietnam) and Korea are the fastest-growing SMB markets in the APAC region. Of these, India alone contributes 24% to this growth and hence forms a key focus area for IBM’s SMB strategy. In order to sustain its market leadership, IBM plans on continuing with its expansion into Tier II and III cities.
The study highlights how globalization in trade is forcing SMBs to improve their efficiency in conducting business. With exports for SMB in India growing with a CAGR of 12.5% over the last 10 years, total imports have been growing with a CAGR of 16% and with more MNCs entering the country, technology adoption in SMBs by year 2015 will be imperative, if we have to stay ahead of competition.
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