SMBs to increase IT spend

By agencies   |   Wednesday, 14 June 2006, 07:00 Hrs
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MUMBAI: A study by AC Nielson and the Computer Society of India (CSI) stated that small and medium businesses (SMBs) in India will increase their IT spend from $4.6 billion in 2005 to $5.8 billion in 2008.

IT staff training, data protection and security being the key areas, SMBs have been defined as companies with a turnover between $12.5 million to $1 billion and an employee strength of 100 to 500.

The study encompassed eight cities and 1,200 people were interviewed across the manufacturing, transport and logistics, pharmaceuticals, hospitality, travel and ITES sectors.

About 24 percent of the small businesses in the IT/ITES sector are likely to increase the IT budget in two years with the pharmaceuticals sector following them, stated the study.

The study stated that India houses 51,891 SMBs and these numbers are expected to touch 53, 963 by 2008. Partha Rakshit, MD, AC Nielsen South Asia said, "We are now consolidating our focus and intend to launch syndicated research in this arena."

The IT industry apex body Nasscom estimated the total IT sepending in India to be approximately $10 billion with SMB spending of $4.5 billion in the region. The World Bank has also granted loans to a tune of $120 million to Sidbi in its efforts.

Avaya Global Connect, a Gurgaon-based communications company has entered the SMB market. Avaya’s SME unit Head, Sanjay Singh said, that says small companies look for returns in the shortest possible time so the companies need solutions focussed technology rather than complicated software and hardware.

The segment is growing at 20 percent CAGR and migrating to IP telephony. The SMB section has fats growing contact centers with 30-60 agents serving domestic clients.

Frost and Sullivan’s survey states that SMB expenditure on telephony is expected to rise to $112.5 million by 2008 from the present expenditure of $37.5 million.

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