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Kolkata
July 23, 2008
India's small and medium businesses (SMBs) are boosting investments on
Internet-related products and services, and are on track to reach $1.26 billion
this year, up a whopping 35 percent over last year, according to a recent study
by New York-based Access Markets International (AMI) Partners, Inc.
“The Internet is a multi-faceted tool,” said Kalyan Banga, Research
Analyst at AMI-Partners. “It is both a facilitator for simple tasks, as well
as a key differentiator among organizations that provides them with a
competitive edge in this digital era,” he added.
For medium businesses (MBs), the Internet has become a way of life and has
reached near-complete saturation. However, a significant growth opportunity
exists within small businesses (SBs) since only around 25 percent of them
currently possess an Internet connection.
A year-to-year usage analysis reveals a similar finding-that SBs are
embracing the Internet by leaps and bounds. The penetration of Internet-enabled
SBs is anticipated to rise by more than four percentage points this year.
“Technology penetration for most Internet-related technologies is
significantly higher for MBs, since almost all of them have stepped into the
second wave of technology adoption,” Banga said, adding, “However, there is
potential here for a rise in penetration of Internet-related technologies for
SBs and even for MBs in case of e-commerce, intranet, etc. For example, the
strategic technology adoption attitude of SMBs indicates that adding or
enhancing e-commerce capabilities is a priority of almost 28 percent of SMBs in
the next 12 months.”
Improvement of Internet speed is a must, as mentioned by more than 50 percent
of SMBs. About 37 percent of respondents would like to opt for a total revamping
of their Internet-access infrastructure, such as replacing or upgrading their
Internet access routers. Broadband usage has taken a forward leap, thanks to the
efforts of ISPs who have significantly increased its affordability and
availability. A glimpse into ISPs reveals the dominance of BSNL/ MTNL and Bharti,
which enjoy an SMB penetration of 44 and 33 percent, respectively. They are
followed at a distance by VSNL/ Tata Teleservices and Reliance.
“Web 2.0 is one of the revolutionary Internet-related technologies that
have taken the world by storm. Indian SMBs have not been too far behind in
following this global trend. Web 2.0 technologies-like social networking,
blogs, podcasts, etc-are gradually being adopted by India SMBs for information
dissemination, marketing and communication modes, etc,” shared Banga.
For example, currently almost 10 percent of SMBs use social networking
services. An additional 33 percent are aware of this technology. Usage of blogs
and podcasts for advertising and promotional activities is higher among MBs.
SMBs are also heavily dependent on information sources like vendor websites
and search engines for gaining awareness about IT products and services. These
are used by about 45 percent of SMBs. The importance of online advertising also
displays an upward trend within SMB media-related activities. The two websites
that show maximum usage for online ads by SMBs are Google and Yahoo. Page(s) 1
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