AMI-Partners: SMBs In India to Spend US$480M on Storage This Year.

Security, e-commerce, CRM and ERP solutions boosting uptake of storage products and services, says new AMI study

KOLKATA, India -- Small and medium businesses (1-999 employees) in India are set to invest more than US$480 million on storage products and services this year, up by over 35% over last year. Much of this growth will come from small businesses (SBs, or companies with up to 99 employees) which comprise 99% of India's SMBs by number of firms.

This comes from the latest report by New York-based Access Markets International (AMI) Partners, Inc. SBs account for over 50% of the overall storage expenses by India SMBs. This proportion will rise as SBs move up the technology adoption ladder.

"SBs tend to spend more on hardware-related storage items, such as PC-attached and server-attached storage to build a stable and robust storage infrastructure," says Dev Chakravarty, Kolkata-based Analyst at AMI-Partners. "By contrast, medium businesses (MBs or companies between 100 and 999 employees) are adopting more advanced network-attached storage media such as SAN and NAS."

MBs also spend more on storage-related services compared to SBs, because MBs have larger storage needs. "MBs need to manage substantial quantities of data compared to SBs," Mr. Chakravarty says. "Moreover they are on a rapid growth path buoyed by the nation-wide economic growth. They are gradually scaling up in terns of size, number of business partners, area of operations, geographical spread, etc. This expansion results in a jump in the quantity of data handled; and consequently, the requirement for robust data storage also surges. Data archiving requirements due to regulatory bindings and compliance needs is also an important driver."

MBs' focus towards storage is also vindicated by their attitude - about 60% said in an AMI survey that increasing IT storage capacity and deployment of enhanced storage solutions will be a primary strategic focus area for them in the next 12 months.

A vital driver of the SMB storage market is the usage of business applications software like ERP and CRM that are quite data-driven. However, their adoption is still at an embryonic stage for both SBs and MBs. "Yet, their rate of growth is quite healthy as SMBs appreciate their benefits," Mr. Chakravarty says. "This includes building long-term customer relationships and loyalty (for CRM) and integrating employees, business partners and branches in a chain where they can collaborate, access data from a unique data repository (for ERP). SMB expenditure on CRM and ERP applications is set to rise by about 20% and 10%, respectively, this year."

Another boost comes from the deployment of websites and e-commerce applications. Their usage is increasing rapidly among Indian SMBs as they strive to use these marketing tools to access customers and suppliers. One other crucial parameter is a focus on security, with more than 50% of MBs and 30% of SBs citing security enhancement as a key technology area. "Adoption of security solutions like data backup and disaster recovery solutions, replication of data, etc, entail a significant need for storage for SMBs," Mr. Chakravarty says. "More than 10% of SMBs plan to adopt applications like offsite data backup and disaster recovery in the next 12 months."

Related Studies

AMI's 2006-2007 India Small Business Market Overview and Comprehensive Market Opportunity Assessment and 2006-2007 India Medium Business Market Overview and Comprehensive Market Opportunity Assessment studies 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 in India, 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 business (SMB) enterprises 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.