Good times drive Singapore's SMB ICT spend

Small and medium-sized businesses (SMBs) in Singapore are set to spend about US$3 billion on IT and telecommunications technologies this year, a study by AMI-Partners has found.

The research house said in a statement Monday that this year's SMB ICT expenditure will experience a 6-percent growth over 2007, with spending on telecommunications to reach up to US$1 billion. AMI-Partners defines the SMB segment as companies that have fewer than 1,000 employees.

The bulk--over 50 percent--of the forecast ICT spending this year will come from SMBs from the wholesale, manufacturing and professional services industries. About 20 percent of IT budgets will be devoted to software, security, storage and networking.

Balaji Sreedhar, research analyst at AMI-Partners, said the top priorities for Singapore SMBs in 2008 would be to deploy in-house or hosted data backup and disaster recovery capabilities, as well as enhancing IT security.

"SMBs in Singapore have been increasing their headcount due to a robust economy and this is driving them to increase their Internet bandwidth, enhance IT security and add more storage in the next 12 months," said Sreedhar, who is based in Singapore.

According to Sreedhar, small businesses are also concerned with boosting Internet or networking bandwidth or connection speeds, while midsize companies are looking to enhance storage capacity and management.

Sreedhar noted that SMBs in Singapore typically make ICT purchases by understanding the total cost of ownership (TCO), and they prefer products that can scale according to the growth of their businesses. SMBs also opt for IT tools that align with their overall business strategy and processes.

Spending, said Sreedhar, is expected to continue if the economy remains buoyant. "It is essential for ICT vendors to keep close tabs on the pulse of the SMB market to better understand the ICT needs of this dynamic market," he added.