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AMI-Partners: SMBs in India to Invest US $4 Billion on Computer Hardware This Year

Posted on: Monday, 2 July 2007, 09:19 CDT

Small and medium businesses (1-999 employees) in India are on track to invest about US $4 billion on computer hardware this year. Last year, overall SMB investments on hardware in India grew 20% to cross the US$3 billion mark, according to a study by New York based Access Markets International (AMI) Partners, Inc.

Last year, notebook PC spending grew at 43% among Indian SMBs. Aggressive pricing by vendors has narrowed the price gap between desktops and notebooks, and the availability of wireless technology has resulted in the mobile computing boom. Desktops however remain the staring point for less IT-savvy small businesses (SBs, or companies with up to 99 staff). However, unlike in the past, adoption now centers on branded computers.

"SMBs are looking beyond the price tag and giving increased weightage to hassle-free maintenance," says Partha Sarathi Sengupta, Senior Analyst at AMI-Partners. "Vendors such as Hewlett-Packard and IBM who are the market leaders have facilitated the growth of branded desktop market by drastically lowering prices and providing excellent after-sales support."

Last year, second and third tier cities in India witnessed a tremendous surge in notebook PC growth due to the extensive coverage of vendors' sales network and aggressive marketing strategies. HP maintained its lead in the SMB space due to its excellent distribution network and efficient after-sales service. Dell and Lenovo emerged as strong contenders in the race for notebook PC market share. Lenovo initially did not have significant brand awareness among SMBs but after its acquisition of IBM's PC division, it's established a significant presence.

"Many SBs who previously did not own any PCs, have now begun to build their IT infrastructure by purchasing notebooks straightaway," Mr. Sengupta says. "On the other hand, many of the larger medium businesses (MBs, or companies between 100 and 999 staff) are replacing desktops with notebooks. Their notebook PC purchases are not simply additional hardware. Larger MBs have more mobile & telecommuting employees and consequently value the benefits of portability."

Server usage has yet to take off in the SB space. Assembled servers dominate the SB landscape with a significant proportion being white boxes. SBs prefer to buy lower cost assembled servers which are regularly serviced by the local computer stores. In the MB segment, data processing, data storage and faster accessibility are of greater importance.

"Branded servers enjoy far more widespread usage among India's MBs," Mr. Sengupta says. "HP and IBM were the market leaders in the Indian MBs segment, we expect server spending to grow exponentially over the next three years. SMB expenditures are set to grow at a CAGR of about 30% over the next three years. Advances in 64-bit, dual-core, and virtualization technologies will also result in increased momentum in server market growth."

About the Studies

AMI's 2006-2007 India Small Business Market Overview and Comprehensive Market Opportunity Assessment and 2006-2007 India Medium Business Market Overview and Comprehensive Market Opportunity Assessment studies highlight these and other major trends in the context of current/planned IT, Internet and communications usage and spending. Products and services covered include established and emerging hardware, software, applications and business process solutions. Based on AMI's annual surveys of SMBs in India, the studies track a broad spectrum of issues pertaining to budgets, purchase behaviors, decision influencers, channel preferences, outsourcing, service and support. Also covered are detailed firmographics and critically important technology attitudes and strategic planning priorities. This data points to key opportunities and messaging hot buttons for vendors and service providers seeking to match their offerings to SMB market requirements.

For more information about this study, AMI-Partners, or our global SMB research, please call 212-944-5100, e-mail ask_ami@ami-partners.com, or visit the AMI Web site at www.ami-partners.com.

About Access Markets International (AMI) Partners, Inc.

AMI-Partners specializes in IT, Internet, telecommunications and business services strategy, venture capital, and actionable market intelligence -- with a strong focus on global small and medium business (SMB) enterprises and extending into large enterprises and home-based businesses. The AMI-Partners mission is to empower clients for success with the highest quality data, business strategy perspectives and "go-to-market" solutions. Led by Andy Bose, the firm has built a world-class management team with deep experience cutting across IT, telecommunications and business services sectors in established and emerging markets.

AMI-Partners has helped shape the go-to-market SMB strategies of more than 150 leading IT, Internet, telecommunications and business services companies over the last ten years. The firm is well known for its IT and Internet adoption-based segmentation of the SMB markets, its annual retainership services based on global SMB tracking surveys in more than 25 countries, and its proprietary database of SMBs and SMB channel partners in the Americas, Europe and Asia-Pacific. The firm invests significantly in collecting survey-based information from several thousand SMBs annually, and is considered the premier source for global SMB trends and analysis.

Source: Business Wire

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