One million Indian SMBs ready to buy PCs

DQC News Bureau

Kolkata:  Forty percent of SBs (small businesses, or companies with up
to 99 employees) in India plan to invest in computers for the first time in the
next 12 months, opening up a huge opportunity for hardware, software and
solution vendors. In literal terms that's over a million SBs, out of a total of
2.7 million SBs in India, that don't own any computers, according to the latest
study by Access Markets International (AMI) Partners, Inc.

"There are still 2.7 million businesses in India, which do not own
computers - and a major portion of them belong to the wholesale and retail
sector," says Dev Chakravarty, Senior Analyst at AMI-Partners. "Almost
50 percent of them say PCs have no relevance to their line of business. But this
attitude is beginning to change."

About 15 percent of non-PC owning SBs surveyed by AMI said they would opt to
buy laptops, instead of a desktop. "The need for laptops is a direct
consequence of the burgeoning mobility needs of India's non-PC SBs,"
Chakravarty says. "The proportion of overall India SMBs with mobile
employees rose to 41 percent in 2006, a rise by nearly twenty percentage points
over 2005. At present, more than half of Indian SMBs have employees regularly
venturing out of town to interact with business partners and will lug a laptop
along," he adds.

The most favored channel for PC-purchases is the local retail store.
PC-purchase by Indian SBs is similar to consumers that buy white goods or
electronic items; SBs prefer the ambience of retail stores where they can weigh
the options of buying over the counter and check all the available brands and
models.

Over 40 percent of SBs said their most preferred laptop or desktop brand is
Hewlett-Packard. Most SBs base their buying decision on newspaper ads-65 percent
of SBs said they rely on newspapers for gathering information about IT-related
products. Next in line was the opinion of friends and family.

"PC vendors need to make greater efforts to educate SBs about the
benefits of PCs and ROI that they may gain due to PC usage," Chakravarty
says. "Holding regular workshops for SBs and tying-up with IT training
institutions can be some ways of increasing awareness. About 10 percent of SBs
cited lack of PC operating knowledge as a reason for not buying computers. Some
SBs cited lack of financing options as another barrier; interestingly, this
concern was not highlighted by SBs in an AMI survey last year," he adds.

The need to automate business processes and to improve efficiency are the two
key drivers that non-PC SBs cited for buying PCs. The urge to keep up with
competition and increase employee productivity, are some other factors.
Maintaining a basic IT infrastructure is also necessary to manage mushrooming
business growth and keep up with demands from business partners.