AMI-Partners' Channel Studies Reveal That HP, Samsung, Lenovo-IBM are the Most Popular Vendors among SMB Channel Partners in India and China.

NEW YORK -- SMB Channel Partners Rank Product Quality, Post-Sales Support, and Direct Delivery to Customers Most Critical Factors When Selecting Vendors

Global and regional technology vendors have aggressively pushed into the SMB market in both India and China and are jockeying for market leadership. In these developing economies where SMB purchasing channels are still evolving, the channel is critically important for vendors to reach SMBs. AMI-Partners' SMB channel partner research shows that the top three vendors whose products/services SMB channel partners in India and China sell are HP, Samsung, and Lenovo (IBM).

The above findings were released today by New York-based Access Markets International (AMI) Partners, Inc., a leading consulting firm that specializes in IT, Internet, telecommunications and business services market intelligence -- with a strong focus on global small and medium business (SMB) enterprises. AMI-Partners conducts the industry's most comprehensive annual tracking surveys of SMBs in more than 20 countries, including North America (U.S. and Canada); Europe (U.K., France, Germany, Czech Republic, Poland and Russia); Asia-Pacific (Australia, China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, Singapore, Taiwan and Thailand); and Latin America (Mexico and Brazil).

Strong Market Opportunity -- The SMB Channel Is Critical for Success

China and India are both rapidly expanding economies with enormous market opportunity. The two countries combined represent 15.5M SMBs that are projected to spend $22.7B in IT products and services in 2005 (see exhibit below).

SMB IT Spending in China and India Increases by 23% to 30% in 2005

            Number of SMBs  Projected 2005 IT      2004/2005 IT
  Country         (M)         Spending (US$B)     Spending Growth
------------ ------------- ------------------- --------------------
   China          8.1              $16.7                23%
------------ ------------- ------------------- --------------------
   India          7.4               $6.0                30%
------------ ------------- ------------------- --------------------

As purchasing channels continue to mature and evolve in China and India, vendors must engage the local SMB channel since they serve as a key purchasing outlet for IT products and services and exert strong influence over the SMB customers' brand selections.

Further highlights from AMI-Partners' new global SMB channel studies reveal:

--Top vendor penetration by country:

--China: Lenovo-IBM (49%), Intel (49%), and Microsoft (46%) are the top vendors whose products/services are sold by SMB channel partners.

--India: Samsung (82%), Intel (81%), and HP (80%) are the most common vendors whose products SMB channel partners sell.

--Channel partner brand influence by country: The channel strongly influences which brand(s) of products/services SMB customers decide to purchase.

--China: Over 75% of the SMB channel exerts influence over their SMB customers' choice of computing hardware and networking hardware/software purchases.

--India: 81% of SMB channel partners influence their SMB customers' selection of computing hardware.

In emerging markets like India and China, the SMB channel serves many low tech-savvy customers that have limited access to information and rely strongly on channel partners for advice. Channel partners play the critical role of educating the market while operating in a challenging economy where access to capital is low and market risks are high. Vendors need to provide strong support to help these partners succeed. "Most leading vendors like Intel, Cisco, and Microsoft have reorganized and aligned their businesses to strengthen their channel programs to succeed on a global basis," said Anil Miglani, Senior Vice President, at AMI-Partners. "Being a market leader in developing economies -- each with its own distinct market needs -- requires vendors to build a robust local presence by establishing strong relationships with local channel partners that are not only trained to sell products and services but can also communicate the unique needs of the local market back to the vendor."

Three Main Themes in Vendor Selection

To take an early competitive lead in building a strong channel presence in India and China, vendors need to understand the local market needs of channel partners. The channel selects vendors based on the profitability potential of the relationship, the vendor's support capability in facilitating the sales process and customer experience, and the vendor's in-market presence. AMI's research shows that the channel in India and China chooses its vendors based on:

--Profitability: In economies where capital is scarce, channel partners in China (91%) and India (82%) select vendors that provide direct delivery to customers. This helps partners mitigate inventory risks in cash-to-carry economies. In addition, attractive gross margins are critically important (India: 82% / China: 85%).

--Pre- and Post-Sale Support: The channel in both countries selects partners that can help them deliver a quality customer experience with strong pre-sales (India: 87% / China: 90%) and post-sales (India: 81% / China: 93%) support. Partners also choose vendors with a reputation for proven and high-quality SMB products and services (India: 92% / China: 90%).

--Local Personal Contact: Channel entities in India (78%) and China (84%) highly value personal face-to-face account contact with their vendor partners. Vendors must adopt an in-market, local presence strategy to conform to local business practices -- particularly in the Chinese market where business is based on relationships and mainly conducted in person.

AMI-Partners will discuss these and related findings in a special webcast presentation scheduled on Tuesday, April 5 at 9:00 A.M. India time, 11:30 A.M. Singapore time and 11:30 P.M. EDT (on Monday, April 4). The webinar will be rebroadcast live on Thursday, April 7 at 2 P.M. EDT. Those interested in registering for the webcast may do so from AMI's home page (www.ami-partners.com).

About the Studies:

AMI's new reports highlight major trends in the context of current/planned IT, Internet and communications usage and spending on the part of small and medium businesses (SMBs) in the Asia-Pacific region. Conducted in the fourth quarter of 2004, AMI's surveys of SMB-focused channel entities in China and India were designed to provide an in-depth understanding of their backgrounds, product/service offerings, business models/attitudes, and relationships with IT vendors. The studies encompass all types of channel partners, including VARs, SIs/NIs, ISVs, xSPs, IT consultants, wholesalers, et al. All respondents were screened to ensure that their company sells IT/telecom products and services, that the respondent is a senior executive or owner, and that the company derives over 50% of its revenues from SMBs.

These reports are the result of extensive data mining conducted by AMI-Partners on findings collected during the surveys. The objective of AMI's analysis is to focus on the most important factors that either influence or are associated with the following channel partner issues:

--Demographics and background

--Products and services offered and/or planned to be offered

--Business models and attitudes

--Vendor selection and certifications

For additional information about AMI's India and China SMB Channel Partner studies, please contact Harshit Mehta at 212-944-5100, ext. 511, or [e-mail].

About Access Markets International (AMI) Partners, Inc.

AMI-Partners specializes in IT, Internet, telecommunications and business services strategy, venture capital, and actionable market intelligence -- focusing on global small and medium business (SMB) enterprises. The AMI-Partners mission is to empower clients for success with the highest quality data, business planning and "go-to-market" solutions. AMI was founded in 1996 under the name of Access Media International (USA), Inc. by Andy Bose, formerly a group vice president at IDC. Since its inception, the firm has built a world-class management team, each with ten to fifteen years' experience in IT, telecom, online communications or multimedia.

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 eight 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 20 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.

For more information on AMI-Partners or our global SMB surveys, please visit www.ami-partners.com or call 212-944-5100.