Digital needs spur IT spending by SMBs

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Indian SMBs have started making investments in digital space to improve their revenue and profit due to competition from technology friendly rivals.

Two facts will support SMBs to keep more funds for investing in IT infrastructure to support their growth. First, India Government’s latest Budget has offered tax exemptions for small business units with a turnover of up to Rs 2 crore against the earlier exemption limit of Rs 1 crore. Second, India also announced 100 percent deduction of profits for 3 out of 5 years for start-ups, for the period from April 2016 to March 2019.

“Close to 60 percent of SMBs report anticipating an increase in their IT spending up to 9 percent in the coming quarters,” said Partha Sarathi Sengupta, AVP at AMI-Partners.

In addition to IT infrastructure, small companies will be spending money for acquiring the latest devices including tablet computers to focus on enterprise mobility.

According to AMI’s latest findings, 52 percent of SBs and 50 percent of all MBs are focused on implementing security for company-owned mobile devices. Almost half of SBs are planning to deploy tablets in the near future. “The fillip for the adoption of tablets will come primarily from the increasing adoption of applications by India SMBs in order to enable and empower their mobile workforce as they expand their footprint to reach untapped and underserved markets in non-urban India,” said Rati Ghose, AVP-APAC, Market Insights at AMI-Partners.

Another research report from AMI Partners reveals that 55 percent of small businesses and 54 percent of medium businesses view migrating business applications such as online storage & document sharing, business analytics and CRM, to tablets and mobile devices to be a strategic priority.

More than half of India SMBs are considering investment in security solutions. “We find SMBs are looking to migrate discrete workloads from PCs to mobile devices. As SMBs purchase more hybrid devices such as tablets to deliver business applications or ensure seamless exchange of information, documents etc, it will involve implementing security solutions and backup solutions,” said Rati Ghose.

A new HubShout survey of over 100 small to medium-sized online marketing agencies revealed that SMBs have increased monthly spend on digital marketing in 2015.

The research agency notes that small business clients are spending on all areas of digital marketing with the highest percentages of spend going to Website Development, SEO and pay-per-click. Web development and SEO were strong in 2014 too.

IT solutions for SMBs

The IT requirements of the SMBs vary depending on the sector they are operating and the size of their budget.

DIGISOL, the networking brand of Smartlink Network Systems, has launched its 8 port PoE, Lite Managed Switch, targeting SMBs.

The DG-GS1510HPL supports 8 10/100/1000BASE-T ports, along with 2 Gigabit SFP ports. The DG-GS1510HPL supports L3 static routing. The DG-GS1510HPL includes green-saving technologies such as IEEE 802.3az and Green-Ethernet. Using the Energy Efficient Ethernet standard, the switch automatically decreases power usage when network traffic is low.

According to a Research and Market analyst organizations are adopting cloud-based solutions to reduce operational costs and increase efficiency.

The analyst also notes that the pay-per-use model offers low upfront costs, resulting high use of cloud technologies among SMBs.

Research and Market said consumer internet services such as Dropbox and Google Drive, both cloud-based storage solutions, are trending rapidly.

In March, technology provider GoDaddy expanded its hosting services to offer Cloud Servers and Bitnami-powered Cloud Applications.

The new offerings are designed to help the individual developers, tech entrepreneurs and IT professionals to quickly build, test and scale cloud solutions.

In February, Acronis released its Acronis Backup and Acronis Backup Advanced solutions, and its Acronis Backup Cloud solution.

The company had said these solutions are ideal for SMBs for their data protection as workloads continue to grow and diversify.

IT companies and strategies for SMBs

HPE believes that today’s SMBs and venture-backed companies have the opportunity to innovate greater than ever.

Targeting SMBs, HPE has enhanced its storage portfolio MSA Storage and StoreEasy 1650, making it affordable and scalable.

ICT research agency Technavio lists Cisco, Dell, HP and IBM as four top contributors to the global IT spending by SMBs.

Cisco has a made-for-midmarket portfolio, which the company promises will deliver reliable, scalable, and highly secure IT infrastructure small and mid-sized business needs.

The networking giant has had $5.5 billion investment in R&D with over 14,000 patents to support an easy migration to new technologies for this particular sector, meaning more options are on the pipeline for SMBs.

Dell and IBM offer server, storage and networking products for SMBs to maximize business productivity.

Outlook

Technavio forecasts global IT spending by SMBs to reach $850 billion by 2020, growing at a CAGR of almost 6 percent. Similarly, Research and Markets expect spending to grow at a CAGR of 5.91 percent.

According to AMI-Partners’ India’s SMB expenditure on Remote Managed IT Services (RMITS) is likely to exceed $1.6 billion in 2016.

The study found that India SMBs have been adopting RMITS at an increasing pace. Channel partners are gearing up to meet the expanding requirements of their SMB customers. In another way, SMBs can be considered as the driving force behind RMITS spending growth in India.

Arya MM
[email protected]