Small and medium businesses (1-999 employees) in India will spend up to US $576 million on packaged software this year, with the bulk of the amount going towards buying p roductivity, operating systems, databases and utilities software. These four software categories will comprise close to 70% of the overall packaged software spending in India this calendar year, according to the latest study by New York based Access Markets International (AMI) Partners, Inc.
Adoption of packaged software in the SMB segments is experiencing a major boost due to a host of factors:
• Enterprise applications vendors now offer SMB-specific solutions, with more focus on affordability, as they have understood the business potential from these segments.
• Solutions are increasingly becoming virtualized.
• A few verticals such as manufacturing, retail, etc, are adopting these solutions rapidly.
• SMBs in the BPO and ITO services verticals have also successfully adopted such solutions.
• India SMBs are already in the next wave of IT adoption.
• Many SMBs realize that lags in their IT infrastructure will cost them a fortune when tech-savvy competition heats up.
• Security and infrastructure development are the major areas of adoption among India SMBs.
In the last few years, a number of factors such as the global slowdown in IT spending, the strengthening rupee and most importantly, the growing IT maturity in India have resulted in an overall boost to the tech sector in India . SMBs are not being left out.
“There is considerable demand for micro-vertical specific solutions, which are being developed by a few focused ISVs and some major vendors” says Mr. Chaudhuri. “These low-cost micro-vertical specific solutions suit the specific needs and pockets of SMBs.” In general, as the overall economy is bullish, the spending power of SMBs is also at an all time high as are their IT budgets. SMBs have already realized that IT would boost their businesses and are asking for a full bouquet of solutions, rather than discrete pieces of software and hardware. They are increasingly turning toward total solutions with services associated in the IT purchases and SLAs for a better ROI.
Vendors in the packaged software market have taken conscious initiatives in recent times to organize their solutions bouquets and product offerings. Their focus is more on end-to-end solutions addressing their needs. In each solution category, there are best of breed products. ISVs and partners are the main influencers for end-users when they are considering a particular technology stack. This factor is relevant for all customer segments, SMBs as well as Enterprise businesses.
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