Vietnam SMBs to cross US$1B IT spend

Buoyed by the country's positive economic growth, small and midsize businesses will accelerate their investments in ICT this year, says analyst.

Small and midsize businesses (SMBs) in Vietnam are likely to spend more than US$1.4 billion on ICT in 2008, according to a new study by New York-based research firm AMI Partners released on Thursday.

The report revealed that the projected spending figure, a 11-percent rise over that in 2007, is buoyed by the country's strong economic growth and push to increase productivity. AMI-Partners defines the SMB market to comprise companies with up less than 1,000 employees.

"Small businesses will account for more than 75 percent of this spending, with the manufacturing industry driving almost 45 percent of total ICT spending," said James Cheng, Singapore-based SMB research manager at AMI-Partners.

He added: "Desktop and notebook PCs will continue to dominate Vietnam SMBs' spending this year. However, Internet, storage and security spending is likely to also grow at a fast clip."

Noting that medium-sized businesses (100 to 999 employees) invested about US$199 million in 2007 on computing hardware alone, Cheng said they are set to increase their use of mobile computing products such as notebooks this year. "Notebook spending among Vietnam-based medium-sized businesses is likely to hit US$19 million this year, up 16 percent over 2007," he said.

Cheng attributed the trend to a rise in mobile employees, adding that 71 percent of medium-sized businesses surveyed had indicated they wanted to expand their mobile workforce.

The report also indicated that investment priorities for SMBs in the next 12 months will center on increasing bandwidth, and improving storage and security capabilities to prepare for their next phase of growth. Businesses will need higher bandwidth to boost collaboration among employees, and increasing amounts of data will continue to strain existing storage infrastructures.

"This trend presents excellent business opportunities for channel partners to offer computing support, development and integration services in areas like storage and security," said Cheng.

Investments by businesses in basic infrastructure is also set to continue. The PC penetration rate among Vietnam-based SMBs in 2007 registered just over 50 percent.

Seow Teck Cheong is a freelance IT writer based in Singapore.