AMI-Partners Research Indicates that U.S. SMB Business Solution Adoption Is Rising, but Market Remains Highly Fragmented; Best, Epicor, FrontRange, Intuit, Lawson, Microsoft, Oracle and SAP enjoy healthy SMB market share despite fragmentation.

NEW YORK -- A new AMI-Partners report, 2004-2005 U.S. SMB Business and Applications Software Market Overview and Assessment, takes a detailed look at U.S. SMB adoption of key business solutions, including customer relationship management (CRM), enterprise resource planning (ERP), accounting and other business applications.

Access Markets International (AMI) Partners, Inc. is 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 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).

Based on research conducted with over 1,000 U.S. SMB customers, the study indicates that the vast majority of SMBs are already using some type of entry-level business accounting solution, although many continue to also use spreadsheet and consumer accounting products for some or all of their accounting needs. Meanwhile, although SMB adoption of more sophisticated ERP and CRM solutions remains relatively low, small businesses, in particular, show a sharp increase in their plans to deploy these solutions over the previous year's survey.

Highlights from the report include:

--63% of U.S. small businesses, and 93% of medium businesses already use a purpose-built accounting solution, but 39% of small and 44% of medium businesses also use Microsoft Excel to help fulfill accounting requirements.

--Small businesses' plans to deploy ERP and CRM/SFA solutions jumped significantly from the prior year's survey, from 3% to 19% for ERP, and from 4% to 23% in the CRM/SFA space.

--CRM/SFA spending growth will outpace that of ERP/SCM, but actual spending will be higher in the ERP/SCM area.

--While well-known vendors such as Best, Epicor, FrontRange, Intuit, Lawson, Microsoft, Oracle and SAP and other leading players enjoy healthy SMB market share, the market remains highly fragmented. For instance, 45% of medium businesses indicate that they use other ERP/SCM solutions from a long list of additional vendors.

--Growing Internet use and familiarity, coupled with increasingly pervasive high-speed access among SMBs are paving the way for SMB consideration and adoption of hosted and software-as-services (SaS) applications, creating a 40% CAGR for these solutions between 2004 and 2008.

"SMBs are growing more comfortable with using technology-based business solutions, and are becoming better educated about how these solutions can benefit their businesses," according to Laurie McCabe, Vice President of SMB Insights and Solutions, and report author. "However, the U.S. SMB market is comprised of a very diverse group of companies with different needs, priorities and budgets, making it a difficult market for a few vendors to dominate in terms of market share -- especially as the proliferation of SMB offerings continues. To rise above the noise in this crowded arena, vendors must identify and align their offerings, channels, delivery options and price points to the requirements of target segments, and communicate loudly and clearly the business value-add they can deliver."

In addition to discussing SMBs' business solutions adoption and plans, this AMI-Partners report provides data and analysis in important related areas. These include SMB software channel preferences, attitudes and dynamics influencing SMB business software adoption, IT and business process outsourcing trends, and competitive dynamics in the U.S. SMB business solutions market.

For more information about this study, including a table of contents, or about AMI-Partners and 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 AMI-Partners (www.ami-partners.com)

Access Markets International (AMI) Partners, Inc. 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 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 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.