India SMBs to see double-digit Net spending

Subcontinent's small and midsize businesses expected to spend heavily on Internet products and services in 2010, resulting in highest year-over-year growth of 16 percent, predicts AMI-Partners.

Spending on Internet and Web site-related products and services will be the highest in 2010, compared with other ICT costs, among small and midsize businesses (SMBs) in India, according to a new report.

Released Wednesday by consulting firm Access Markets International (AMI) Partners, the study noted that Internet spending by India SMBs, which are defined as companies with up to 999 employees, will grow about 16 percent by end 2010, from US$1.45 billion in 2009.

Dev Chakravarty, assistant manager of research at AMI-Partners India, noted in the report that while India SMBs have reached saturation point in adopting basic Internet connectivity infrastructure, there is still a "considerable gap" when it comes to technologies such as broadband, Web sites, intranet and e-commerce.

AMI-Partners pointed to a past survey which found that SMBs in the country were still not satisfied with their connectivity infrastructure and had listed improving Internet or networking bandwidth as their top priority. In fact, more than half of PC-owning SMBs still had not subscribed to a broadband service, it noted.

The India government's recent grant of 3G spectrum will also provide an alternative high-speed Internet access to SMBs. An analyst had forecast in an earlier ZDNet Asia report that HSDPA (high speed downlink packet access) subscribers in India accessing mobile broadband network through laptops, are expected to reach 13 million by 2014.

India SMBs embrace social media
The report also noted that India SMBs are catching up with the social media frenzy, which was previously led by consumers.

Nine out of 10 SMBs with Internet connection are already using social media for business or professional purposes, with social-network sites such as Facebook, Twitter and LinkedIn the most frequently deployed, said AMI-Partners.

Companies use social media mainly for sales and marketing, keeping in touch with customers, advertising and recruiting new employees, according to the report.

However, compared with the adoption of social media, Web site ownership among India SMBs is still at a low of one out of four firms. Even among SMBs with Web sites, most are hosted on third-party vendor and service provider servers, said AMI-Partners.

On a positive note, the research firm said many SMBs are considering deploying their own Web sites in the next 12 months. "Even if a fraction of these deployment plans are translated into actual practice, this entails a significant boost of Web site penetration within India SMBs," said Chakravarty.

According to AMI-Partners, for many India SMBs, a company Web site serves to provide information about their organization, products and services, and quick responses to queries from customers and prospects.

AMI-Partners added that SMBs can leverage Web sites as marketing tools to reach beyond national boundaries and to showcase their capabilities to a wider potential audience, a feat which would cost much more using traditional marketing methods.