AMI-Partners: Among U.S. Small Businesses, Networking Products Show Fastest Growth.

Three categories--wired and wireless switching, routing, and networking products--will see US$1.9B spent this year, says AMI study

NEW YORK -- Wired and wireless switching, routing, and networking products are the top three fastest growing IT areas among U.S. small businesses (1-99 employees) this year. These three categories will account for about US$1.9 billion, up 13% from 2006, according to a recent survey by New York-based Access Markets International (AMI) Partners, Inc.

"Continued pressure to improve productivity, reduce traditional telecom costs, improve response time to co-workers or external client--these factors will continue to fuel the networking market," says Melissa Chong, New York-based Analyst at AMI-Partners. "About 53% of U.S. SBs have now installed a local area network (LAN). However, only 66% of these LAN-enabled SBs have a client/server-based network, while 33% still use peer-to-peer networks." Wireless LAN environments are even less common, with only one in three LAN SBs having a wireless LAN setup. "This may come as a surprise, as peer-to-peer networks don't provide much by way of security, which is on top of every SB's mind," says Ms. Chong. "For the past two years, improving Internet or networking bandwidth/connection speed has been one of the top five IT priorities among U.S. SBs. Improving connectivity very likely entails upgrading networking equipment, further supporting market growth."

After setting up their basic needs, such as PC, Internet and basic software applications, SBs are increasingly aware of the advantages of pooling these resources for further benefits. A connected office means people and ideas are shared more quickly. Timely, informed decisions can be made. Shared email, instant messaging and other real-time collaborative applications help to reduce time and communication cost.

"Education is, of course, still necessary, but many parallel IT products are being launched that fuel awareness," Ms. Chong says. "For example, multi-functional printers offer scan-to-network or scan-to-email functionalities. This allows SBs to scan/copy a hardcopy document and upload or email it directly to another PC or onto a network folder to be accessed by all. As the price of these types of printers continue to decrease the return on investment increases. If an SB doesn't operate a networked environment, how would it benefit from this functionality?"

Given that 47% of US SBs do not yet deploy a LAN, opportunities to catch this market abound. LAN environments are necessary precursors for more advanced adoptions such as VPNs (virtual private networks), networked storage or security options, intranets and hosted/premise-based IP communications. Service providers should be prepared to offer not just products, but solutions that utilize and enhance the network's full capabilities, which is what SBs want and need.

About the Study

AMI's 2006-2007 U.S. Small Business Market Overview and Comprehensive Market Opportunity Assessment study highlights these and other major trends in the context of current/planned IT, Internet and communications usage and spending. Products and services covered include established and emerging hardware, software, applications and business process solutions. Based on AMI's annual surveys of SBs across the U.S., the study tracks a broad spectrum of issues pertaining to budgets, purchase behaviors, decision influencers, channel preferences, outsourcing, service and support. Also covered are detailed firmographics and critically important technology attitudes and strategic planning priorities. This data points to key opportunities and messaging hot buttons for vendors and service providers seeking to match their offerings to SB market requirements.

For more information about this study, AMI-Partners, or our global SMB research, please call 212-944-5100, e-mail [e-mail], or visit the AMI Web site at www.ami-partners.com.

About Access Markets International (AMI) Partners, Inc.

AMI-Partners specializes in IT, Internet, telecommunications and business services strategy, venture capital, and actionable market intelligence -- with a strong focus on global small and medium businesses (SMBs), and extending into large enterprises and home-based businesses. The AMI-Partners mission is to empower clients for success with the highest quality data, business strategy perspectives and "go-to-market" solutions. Led by Andy Bose, the firm has built a world-class management team with deep experience cutting across IT, telecommunications and business services sectors in established and emerging markets.

AMI-Partners has helped shape the go-to-market SMB strategies of more than 150 leading IT, Internet, telecommunications and business services companies over the last ten years. The firm is well known for its IT and Internet adoption-based segmentation of the SMB markets; its annual retainership services based on global SMB tracking surveys in more than 25 countries; and its proprietary database of SMBs and SMB channel partners in the Americas, Europe and Asia-Pacific. The firm invests significantly in collecting survey-based information from several thousand SMBs annually, and is considered the premier source for global SMB trends and analysis.