AMI-Partners' India Survey Shows Increasingly Dynamic SMBs on the Verge of Leading India to Economic Prosperity; The 'IT and Telecom' Sector, Considered the 'Engine of the New Economy', Has Shown Substantial Development Among India SMBs.

KOLKATA, India -- SMBs Are Keen to Strengthen the Bond between Daily Business Functions and ICT Usage, Leading to Operational Efficiencies, Higher Profitability and Faster Growth Rates 

Small and medium businesses constitute one of the most important segments of India's industrial economy, a new survey shows, accounting for approximately 95% of the total industrial units and contributing a substantial amount to India's GDP. While SMBs play a critical role in developed and developing nations alike, the total revenue earnings by India SMBs in 2004 stood at $898 billion, of which India MBs earned the lion's share of over $625 billion. Buoyed by their recent performance, 18% of MBs expect their revenues to rise by over 20% in the near term.

At the same time, small businesses in India constitute approximately 99.4% of the country's SMB universe, and play a key role in India's growing economy. At present SBs in India generate employment to a workforce of over 21 million people and more than a third of them have plans to recruit an additional 3.4 million personnel in 2005.

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 20 countries, including North America (the U.S. and Canada); Europe (the U.K., France, Germany, Czech Republic, Poland and Russia); Asia-Pacific (Australia, China, Hong Kong, India, Japan, Korea, Malaysia, Singapore, Taiwan and Thailand); and Latin America (Mexico and Brazil).

IT & telecom -- engine of new economy

While traditional parameters like GDP growth, job creation, and revenue earnings can be used to gauge the economic health of a nation, ICT-related factors such as technology adoption, IT/telecom usage and spending trends also play a vital role and must be taken into account. Currently, telecommunications and IT create the strongest multiplier in an economy. These technologies affect a nation's ability to move and use power, transport goods and services, increase mobility, access medical care, increase its knowledge base, and govern. Combined, these factors can be considered the engine that drives the new economy. "It can be anticipated," noted Sunetra Datta, Research Analyst at AMI-India, "that increased spending on IT and telecommunications products and services by India SMBs will stimulate India's economy and take it to new heights in the near future."

ICT and the significance of SMBs in the Indian economy

India SMBs are forging strong links in business value chains as their processes become digitized and information flow becomes less manually or paper driven. Adoption of computers, usage of software, and the updating of Web sites have brought SMBs increasingly to the fore. "SMBs are quite keen to strengthen the bond between daily business functions and ICT usage, leading to operational efficiencies, higher profitability and a faster growth rate," observed Ms. Datta. In the present context, more and more SMBs are viewing IT as an essential strategic tool for their business instead of just another technology investment. In India, MBs have already crossed the first wave of IT & technology adoption. SBs, on the other hand, are still in the first wave, primarily focusing on basic computing needs. Desktop PC penetration among India MBs has reached saturation. In addition, as many as two fifths of MBs in India are using notebooks due to heavy discounts and promotional offers on top of inherent benefits such as mobility and wireless connectivity.

Demand for IT products & services on a roll, spending CAGR over the next five years being predicted at 28%

The survey by AMI Partners shows that India was among the top five IT markets in the Asia-Pacific region. India SMBs have emerged as one of the highest spenders on IT and telecom services in the APAC region (excluding Japan). Among India SBs, IT spending was close to $3.5 billion in 2004, with computing hardware (computers, printers, peripherals and servers) accounting for over half of expenditures. This high proportion of computing-related spending can be attributed to India SBs' eagerness to build a strong basic computing infrastructure. Highly tech-savvy services sectors were responsible for two fifths of India SBs' IT spending.

Telecom vendors' growing interest in the India SMB market 

India SBs spent almost $6 billion on local and long-distance telephony services, reflecting that usage is still basic and they will likely access more advanced telecom services in due time. However, the entry of new operators and the introduction of novel services are contributing to growth in this segment. Advanced technologies and increasing importance of wireless communication were factors that escalated the subscriber-base. "The key to success for the vendors," added Ms. Datta, "will be to arrive at 'best-fit-possible' offerings for SMB customers that would be in line with their specific requirements." SMBs' choice of vendors will largely depend on the vendors' go-to-market strategy. The majority of India SMBs are inclined towards buying both local and long-distance services from a single service provider. Over two fifths of India MBs are likely to shift to providers who offer service packages that include local, long-distance and high-speed Internet access.

About Access Markets International (AMI) Partners, Inc. (AMI-Partners)

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 its 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, a former 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 and 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 nine 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; and its proprietary database of several thousand SMBs in the U.S., Europe, Asia-Pacific and Latin America. 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.