Scalability Is Top-Of-Mind Among India SMBs

More than 60 percent of small and medium businesses (SMBs) in India say they prefer to buy IT products and services that offer scalability to keep up with SMB growth plans. This comes from a recent study conducted by New York-based Access Markets International (AMI) Partners.

“SMBs in India are gradually becoming more aware and forward looking in their IT decision-making process,” says Rati Ghose, AMI-Partners’ senior manager - Market Insights. “Until recently, buying IT products and services was done in an ad-hoc and unplanned manner. India SMBs now consider several factors - including the organisation’s growth plans, geographic expansion, and manpower additions - before investing in IT.”

Many India MBs (medium businesses) are now moving to what AMI-Partners refers to as the ‘second wave of technology adoption’. In the first wave, companies equip themselves with basic IT infrastructure: PCs, simple accounting and HR tools, and productivity solutions. In the second wave, firms focus on internal linkages, connecting within the enterprise with networking hardware and software.

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“India SMBs are also becoming aware of TCO (total cost of ownership),” Ghose says. “As they start to adopt business- or vertical-specific software applications and solutions–instead of one-time capex (capital expenditures) for hardware or packaged software – issues like RoI and TCO are increasingly being discussed by SMBs. Over four in five India SBs (small businesses) state that they plan to develop and formalise the structure and planning of their IT decision-making process.”

Overall, SMBs are taking a more pragmatic and cautious approach to investment in IT products and solutions and are concentrating on using their existing resources in an optimal manner. Ghose says, “As the full impact of the global financial meltdown sets in, SMBs have lowered their IT budgets in the face of uncertain market conditions, liquidity crunch and other macro-economic factors. Criticality of IT investments is being evaluated and only essential expenses are being prioritised and met.”

Since the majority of concerned SMBs (AMI-Partners defines concerned SBs as those that expect the local/ regional economy will get worse in the next one year and concerned MBs as those that expect the local/regional, national or global economy to get worse in the next one year) derive their revenues from customers within the local/ same state, these firms feel they are most likely to be impacted by the local/ regional economies. “However, it is also evident that the global economic crisis will not leave them untouched. A significant proportion of concerned SMBs have anticipated a revenue decline in the next 12 months,” Ghose concluded.