Large Businesses in India Spent Almost $2.3B¹ on IT and Telecom in 2007

KOLKATA, India--(BUSINESS WIRE)--Large businesses (LBS)² in India spent nearly $2.3 billion on IT and telecom solutions last year. IT products and services contributed a majority of this spending—more than two thirds—according to the latest study by Access Markets International (AMI) Partners, Inc. A glance at the vertical profile of this LB segment shows that manufacturing dominates the LB pie in business numbers, followed by the service sector.

“In terms of business universe, large businesses are quite miniscule, comprising just about 0.3% of the entire PC-owning business universe,” says Swati Sasmal, Senior Research Manager at AMI-Partners. “Yet, they make up a sizable proportion (almost one sixth) of IT spending by Indian businesses. Hence, they provide a considerable opportunity and are much sought-after by IT vendors who can earn huge returns on investment through minimal marketing. LBs possess a high level of knowledge and expertise regarding IT solutions and a well-structured and systematic purchase process. They are also the frontrunners in trying out newer technology solutions. These factors make it easier for IT vendors to approach them for prospective sales.”

Computing accounts for the larger proportion (46%) of the overall India LB IT spending—similar to SMBs. The proportion allocated to basic computing is much smaller than the SMB counterparts, though, with a greater emphasis on connectivity, networking and Internet applications. “This is because a majority of LBs have already built up their basic computing and connectivity infrastructure and are aiming at ‘extending the enterprise’ by leveraging the network,” says Swati. “In this phase, there is a greater focus on deployment of advanced technologies such as enterprise applications (ERP/CRM), remote-access solutions (RAS, VPN), wide-area networking (WANs), VoIP, networked storage (SAN/NAS), intranets, and managed security solutions.”

A vital strategic focus area for India LBs in the next 12 months is the extension of network connectivity to branch offices & other remote locations—cited by three quarters of respondents. This has become almost imperative in view of the rapid expansion of these enterprises. Two other strategic focus areas are security and storage, indicated by two thirds of LBs. Within the security arena, basic technologies like anti-spam and anti-spyware show significantly high penetration, at approximately 55-65% of businesses. It is interesting to note that even advanced technologies like security management, web filtering, intrusion detection/ prevention, disaster recovery, encryption and identity & access management display healthy usage levels—by approximately 30-40% of businesses.

India LBs are on their way towards complete automation of their business processes; to facilitate this they are making efforts to fully integrate information technology into every aspect of their business transactions. AMI’s survey showed that all businesses in this segment enjoyed revenue growth; a typical LB experienced a healthy 20% rise in turnover in the last financial year. Similar trends are expected to continue in the next 12 months.

Large enterprises have also developed awareness about the intrinsic advantages of enterprise software, such as complete business integration, increased efficiency, higher quality, and lower error rates. Consequently, a key feature of India LBs has been the high usage levels of enterprise software applications like ERP. A majority of India enterprises (two thirds) currently own and use some form of ERP with a significant proportion planning to adopt the same newly in the next 12 months.

About the Study

AMI’s 2007 India Large Business Overview and Comprehensive Market Opportunity Assessment study highlights these and other major trends in the context of current/planned IT, Internet and communications usage and spending. Products and services covered include established and emerging hardware, software, applications and business process solutions. Based on AMI’s annual surveys of LBs in India, the studies track a broad spectrum of issues pertaining to budgets, purchase behaviors, decision influencers, channel preferences, outsourcing, service and support. Also covered are detailed firmographics and critically important technology attitudes and strategic planning priorities. This data points to key opportunities and messaging hot buttons for vendors and service providers seeking to match their offerings to SMB market requirements.

For more information about this study, AMI-Partners, or our global SMB research, call 212-944-5100, e-mail ask_ami@ami-partners.com, or visit our website at www.ami-partners.com.

About Access Markets International (AMI) Partners, Inc.

AMI-Partners specializes in IT, Internet, telecommunications and business services strategy, venture capital, and actionable market intelligence — with a strong focus on global small and medium businesses (SMBs), and extending into large enterprises and home-based businesses. The AMI-Partners mission is to empower clients for success with the highest quality data, business strategy perspectives and “go-to-market” solutions. Led by Andy Bose, the firm has built a world-class management team with deep experience cutting across IT, telecommunications and business services sectors in established and emerging markets.

AMI-Partners has helped shape the go-to-market SMB strategies of more than 150 leading IT, Internet, telecommunications and business services companies. The firm is well known for its IT and Internet adoption-based segmentation of the SMB markets; its annual retainership services based on global SMB tracking surveys in more than 25 countries; and its proprietary database of SMBs and SMB channel partners in the Americas, Europe and Asia-Pacific. The firm invests significantly in collecting survey-based information from several thousand SMBs annually, and is considered the premier source for global SMB trends and analysis.

¹ US dollars

² Businesses with 1,000-25,000 employees; small and medium businesses have up to 999 employees