AMI-Partners: Rising Costs and Insufficient Funds Cause for SMB Concern.

This is Forcing Many SMBs Worldwide to Re-Evaluate Their Competitive Strengths, Says New AMI Study

NEW YORK -- Rising operational costs, insufficient access to capital and growing competition is threatening the bottom lines of small and medium-sized businesses worldwide, and is forcing many SMBs (companies with up to 999 employees) to re-evaluate their competitive strengths and adapt their core business strategies so as to stay viable.

That's the verdict from a recent study on the evolving business strategy of global SMBs by New York-based Access Markets International (AMI) Partners, Inc. The study notes that SMBs are being forced to rethink their investment objectives in order to stay dynamically competitive in the ever-changing marketplace.

Mature Markets

In the mature markets across the US, UK and Japan, SMBs cite the uncertain economic environment and insufficient access to capital as the top two issues hindering their business growth. SMBs in mature markets now need to sink more investment into new products or services in order to compete by introducing higher value products and services.

Small businesses - about 16% in the US and 17% in UK, for example - are looking at downsizing their business operations through layoffs and outsourcing to combat costs. On the other hand, medium businesses (100-999 employees) are looking to scale their business operations outwards to get more economies of scale.

"SMB concerns in these markets are tied to their current perception of the economy as being in a period of relative instability," says New York-based AMI Analyst Spencer Richardson. "Therefore, they are looking to hedge their risks by trying to reduce their operational costs, as well as attempt to secure their future positioning via more investments on boosting their products and services."

Emerging Markets

In the emerging markets, lack of access to capital is a major concern, as in the mature markets. "While firms in mature markets are more concerned with satisfying their current revenue forecasts, SMBs in emerging markets - such as India in particular - are finding it difficult to obtain the necessary capital to grow their operations," Mr. Richardson says. "This leads to delays in the launch of new products and services, since cost control often takes the form of curtailed development efforts. We anticipate a significant re-allocation of capital into marketing activities and branding strategies, most notably among Chinese firms, as the growing presence of foreign investment brings with it a growing sense of competition within these regions."

Newly Industrialized Markets

In the newly industrialized markets (NIM) in South-East Asia, the biggest worry is getting access to market intelligence and information. SMBs in the NIM arena represent just over 7% of the worldwide SMB marketplace. "SMBs in the NIM regions," Mr. Richardson says, "are faced with a very real issue; their basic infrastructure deficit disables much of their ability to communicate with the outside world, given the near-synonymous relationship between access to information and access to capital. This is a potentially hazardous cycle in which SMBs in mature markets are taking giant strides in business operations while SMBs in the NIM regions are struggling just to catch up."

About the Studies

AMI's 2006-2007 Worldwide Small and Medium Business Market Overview and Comprehensive Market Opportunity Assessments highlight 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 SMBs across the United States, the United Kingdom, Japan, China, India and Korea, the studies track 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 SMB 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 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.