Indian SMBs to spend $3.7 Billion on IT

Bangalore: According to a report by AMI-Partners, small and medium manufacturing firms will spend $3.7 billion on IT infrastructure in 2009. "Some of the key drivers for escalating investment in IT infrastructure are increased competition, customer demand for high quality products with reduced lead time and the need for integration of different business functions," said Abhilash DB, Analyst, AMI-Partners. SMBs have strength up to 999 employees.

"Small and medium manufacturing businesses in India operate in lean environments with limited resources and IT personnel," he said. The majority of small and medium manufacturing firms work with larger manufacturing companies within given specified standards.

Computing products have the largest share in IT spending, as many manufacturing firms have upgraded and revamped their IT infrastructure. Internet products have second largest share in spending because of the need to establish real time connectivity with business partners.

"There is still a significant scope of increasing internet penetration within small businesses in particular, about one quarter of PC owning small businesses have yet to deploy internet access. This is mainly due to lack of internet and broadband options," said Abhilash.

Various vertical focused Independent Software Vendors (ISVs) are entering the SMB manufacturing space with SaaS based offerings, which is drawing IT decision maker's attention. Many on-demand solutions are available which help to improve business profitability like solutions for managing accounting and payroll, materials movement and processing, logistics and order management. Increased broadband adoption will lead to a boost in the adoption of these types of on-demand solutions.