Asia-Pacific SMBs will spend US$153 billion on IT and telecom in 2009

Wednesday, 11 February 2009 01:00

New York-based Access Markets International has been predicting where small and medium businesses will be  spending the most money. The company identifies China, Korea, and India as the top three markets.  
Small and Medium Businesses (SMBs, or companies with up to 999 employees) in the Asia-Pacific region  excluding Japan region will spend US$6.5 billion more in 2009 compared with 2008. Chinese, Korean, and  Indian SMBs make up more than 50% of Asia-Pacific spending, according to a latest study by New York-based  Access Markets International (AMI) Partners Inc. 
IT and telecom spending by China SMBs will alone constitute close to 30% of the total spending by Asia-Pacific  SMBs in 2009. Korea, a relatively more mature market, is on track with about 20% of total Asia-Pacific SMB  spending, while India SMBs are expected to chalk up 8.5% higher growth than last year's spending, making  India the fastest growing SMB ICT market in Asia-Pacific for 2009.  
"While we expect more than 2% spending contraction in Australia and New Zealand SMBs, they only make up  about 10% of the total IT and telecom spending among Asia-Pacific SMBs. Spending growth from bigger SMB  markets in China, Korea and India - even if it is slower than last year - will easily compensate for the reduction  among Australia and New Zealand SMBs," says Dr. Vu-Thanh Nguyen, a Singapore-based Research Analyst at  AMI-Partners. "These big spenders, together with other growing markets like Indonesia and Malaysia will help  to maintain a spending growth of 4.5% for the whole of Asia-Pacific."  
Telecom services and computing, eg, printers and printing supplies, PCs, and servers, are the two broad  categories that will receive significant investment by Asia-Pacific SMBs, about 60% of their total IT and  telecom spending. "Nowadays, telecom services and computing are as integral to businesses as water and  power to households. Despite the economic downturn, SMBs will still have to spend on basic needs like printing.  They also need to continue upgrading and replacing old PCs, and buying new systems such as tablet PCs to  maintain and increase employee productivity. Ultimately, such investments are seen to help SMBs reduce costs  and enhance their competitiveness." 
"Similarly, spending on telecom services will not only increase business opportunities, collaboration and time  efficiency, but also help businesses to reduce expenses. In this crisis, there will be a heightened need to  communicate and maintain good relationships with existing customers, partners, and employees, as well as to  attract new customers. Therefore, we expect to see similar, if not higher, spending on telecom services and  computing compared with last year," Dr Nguyen maintains. 
While Australian and New Zealand industries will reduce their IT and telecom spending in 2009, SMBs in other  Asia-Pacific countries will expand their investment, though at different rates. For example, spending growth  rates are lower in China real estate and retail industries but higher among Chinese pharmaceuticals and life  sciences. In India, SMBs across all industries are expected to lower their spending growth rates by 1 to 2%. A  similar trend is expected for Vietnam SMBs across industries, though with a much smaller magnitude of less  than 0.5%. 
"Appreciating key country, vertical and employee size opportunities will certainly help IT and telecom vendors  to find their silver lining in the midst of this recession," Dr Nguyen holds. While most Asia-Pacific countries are  expected to experience lower growth in 2009, well-informed vendors could still benefit by offering  cost-effective solutions to customers in high potential market segments. 
* AMI's Global IT Forecast Model provides an authoritative view of IT adoption and spending patterns in SMBs  across 28 IT sectors and 29 countries, with roll ups to regional and worldwide views. Updated in Q2 and Q4  each year, the Global Model "provides ever-increasing strategic market planning value via expanding  geographic and IT sector coverage." Sector-specific adoption and spending patterns are further broken out by  industry standard employee size and vertical market categories. Products and services covered include  established and emerging hardware, software, applications, and business process solutions. In light of global  recessionary fears and the impact of economic downshifts on business, AMI-Partners has expanded its  tracking studies to include several questions pertaining to SMBs' perceptions of their dependence on local,  national and global economies as well as their expectations about economic growth.

More info:

• www.ami-partners.com

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