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In
March 2007, the New York-based Access Markets International
(AMI) Partners, Inc., a provider of global market intelligence
and consultancy services said that small and medium businesses (SMBs)
in India were expected to spend around US$8 billion in 2007 to
improve their IT infrastructure. This represented a 24% growth
over the amount spent in 2006. In the past, some of the issues
that constrained most SMBs from investing in IT infrastructure
were cost considerations, inability to afford technical experts,
and lack of awareness of the value of IT.
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Analysts noted that though controlling costs still
remained a priority for SMBs, they had begun to realize the
opportunities provided by IT. The growth of the Indian economy and
revenues of SMBs was a factor that was expected to result in an increase
in IT spending among SMBs.
According to AMI, 93% of small businesses (i.e. businesses with 1 to 99
employees) and 86% of medium businesses (i.e. businesses with 100 to 999
employees) showed an increase in revenues in 2006.
Moreover, in a business environment in which they had to compete with
larger domestic and international competitors, SMBs were increasingly
viewing their investment in IT as a competitive strategy. This presented
the IT vendors with a huge opportunity as this market had traditionally
been underserved by most vendors.
In March 2007, Intel India (Intel) announced that it had started an
initiative across the country called as the “SMB Advantage Program”.
Through this initiative Intel aimed to assist its channel partners to
increase their business with SMBs. It had identified 160 channel
partners (comprising System Integrators, Original Equipment
Manufacturers and Retail Partners) from 15 cities across India.
Intel had also identified five key SMB verticals – manufacturing (auto
ancillaries, gems and jewelry, pharma and textiles), animation, stock
broking and higher education. Intel would provide special training to
its partners on the IT needs of these SMBs to help its partners adopt a
consultative selling mode and deliver customized solutions. Intel also
said that it had started this initiative as the target segment preferred
to do business with local firms.
In collaboration with its partners, Intel also planned to host special
events for these verticals where customers could purchase a complete
solution. It had also tied up with ICICI bank to work with select
partners to provide special loans to SMBs to invest in Intel’s
solutions.
Some of the other initiatives in the program were focused on helping
partners to establish proof of concept centers to help showcase its SMB
solutions, and development of case studies along with partners that
showcased how Intel’s solutions had made a difference to the SMBs.
There were also reward and recognition programs for outstanding
partners. In addition to Intel, other IT giants such as Microsoft
Corporation and HP had also adopted aggressive strategies to woo SMBs in
India.
However, some analysts opined that these were significant challenges in
targeting the SMBs. These businesses were spread throughout the country
and across various industries and the IT needs of SMBs in one sector
were quite different from that of the other.
The awareness level of the value of IT was still low among a high
percentage of small businesses. Other challenges included lack of
skilled and competent partners, and wide-scale piracy. The choice of an
effective marketing communication strategy, media channel, etc, too
posed a considerable challenge due to the diversity among the target
segment.
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