News

India SMBs to Spend USD 576 Million on Packaged Software in 2006

Small and Medium Businesses (SMBs) in India will spend up to USD 576 million on packaged software this year, with the bulk of the amount going towards buying productivity, operating systems, databases and utilities software. These four software categories will comprise close to 70% of the overall packaged software spending in India this calendar year, according to the latest study by New York based Access Markets International (AMI) Partners.

“We expect the software market to grow at a huge 25% this year, following last year’s similarly impressive growth,” says Nirupam Chaudhuri, Kolkata-based Research Manager at AMI-Partners. “As most of the purchases will happen via channels, IT vendors are increasingly marketing their products through them. Channels provide both the market reach and the customer knowledge. As India SMBs are spread across several clusters through out the country, the reach of channels becomes a crucial factor.”

Adoption of packaged software in the SMB segments is experiencing a major boost due to a host of factors:

Enterprise applications vendors now offer SMB-specific solutions, with more focus on affordability, as they have understood the business potential from these segments
Solutions are increasingly becoming virtualised
A few verticals such as manufacturing, retail, etc, are adopting these solutions rapidly
SMBs in the BPO and ITO services verticals have also successfully adopted such solutions
India SMBs are already in the next wave of IT adoption
Many SMBs realise that lags in their IT infrastructure will cost them a fortune when tech-savvy competition heats up
Security and infrastructure development are the major areas of adoption among India SMBs

In the last few years, a number of factors such as the global slowdown in IT spending, the strengthening rupee and most importantly, the growing IT maturity in India have resulted in an overall boost to the tech sector in India. SMBs are not being left out.

“There is considerable demand for micro-vertical specific solutions, which are being developed by a few focused ISVs and some major vendors” says Mr. Chaudhuri. “These low-cost micro-vertical specific solutions suit the specific needs and pockets of SMBs.” In general, as the overall economy is bullish, the spending power of SMBs is also at an all time high as are their IT budgets. SMBs have already realised that IT would boost their businesses and are asking for a full bouquet of solutions, rather than discrete pieces of software and hardware. They are increasingly turning toward total solutions with services associated in the IT purchases and SLAs for a better ROI.


print	save	email	comment