IT spending by Indian SMBs to grow by 26%

According to a study by New York-based AMI-Partners, SMBs
across the Indian subcontinent are set to spend $7.7 billion to beef up their
info-tech infrastructure and solutions this year. A third of all Indian SMBs
anticipate about a 20% increase in annual revenues, and will boost their IT
spending.

"Increased competition and the challenges brought by
globalization are forcing medium businesses (MBs) to fine-tune their IT
implementation," said Partha Sarathi Sengupta, Research Analyst at
AMI-Partners.

PARTHA SARATHI SENGUPTA: Medium businesses to fine-tune their IT implementation because of increased competition and challenges brought by globalization and competing with large businesses

"Majority of India's MBs are in the second wave of IT
adoption, though several progressive MBs have already moved into the third wave
of IT adoption and are competing with large businesses in terms of IT
usage," he added.

Networking emerged as the primary focus area among Indian MBs.
As the Indian economy surges, businesses are anticipating strong hiring over the
next year and are planning on opening and interconnecting new branch offices.

These factors automatically create a need to effectively
connect with branches and remote locations - thus enhancing the importance of
networking. Storage is the other promising sector as storage expenditures are
anticipated to grow 44% this year.

"The growing volume of data and data security are two
influential factors in determining storage needs in this business segment",
observed Partha.

The study points out that SBs will be the main driver for IT
market growth. The India SB market is comprised of approximately 7.5 million
businesses of which 21 percent currently utilize PCs.

"The market has tremendous growth potential as a large
section is still untapped," commented Paratha.

AMI's study shows that 40% of non-PC SBs are planning to
purchase 1.4 desktops on average next year, allocating a future planned hardware
budget of over $570 per business.

Being a price-conscious market, the small business PC market
is currently dominated by assembled PCs. PC manufacturers are attempting to
introduce cheaper computer devices into the market leading to stiffer
competition.

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