AMI-Partners Study Shows Small Businesses Are Still Largely Unaware of Web-Based Personal Productivity Applications.

--Online Vendors Must Overcome Inertia, Concerns about Security Threats And Potential Incompatibility Issues to Accelerate Adoption--

NEW YORK -- Microsoft's Office suite has long dominated the personal productivity software market. However, the advent of online, Web-based productivity applications from innovators such as ThinkFree and Zoho, and more recently, IT giant Google, are providing new challenges to Microsoft's desktop dominance. Will these Web-based rivals be able give Microsoft a run for its money, and topple the status quo?

AMI's new study, Will Small Businesses Buy the Online Office?, fielded in the U.S., U.K., Brazil and India, examines small businesses (firms with 1-99 employees) and their awareness, adoption, drivers and inhibitors for online personal productivity solutions. Survey results show that many small businesses are unaware that online personal productivity solutions are even available. In fact, 38% of U.S., 50% of U.K., and 53% of India respondents were not aware of this option.

In addition, "Inertia, potential security threats, and possible incompatibility between online documents and PC software serve as inhibitors to SB adoption of online personal productivity solutions," according to Laurie McCabe, author of the report and Vice President for SMB Insights and Solutions at AMI-Partners. Internet connection and performance problems also hinder adoption in Brazil and India.

What would drive SBs to adopt online productivity applications? A sizable percentage of respondents view time and cost savings convenience, mobility and ease of use as key benefits of using online applications. Respondents are also much more likely to consider online services given certain cost and pricing breaks. A high percentage of customers in all four countries are willing to accept advertising in exchange for free use of online personal productivity software, and a significant number of customers would choose the online route given a large enough pricing advantage over desktop solutions. Customers also indicated strong interest in hybrid solutions that provide flexible access via both desktop and Web interfaces.

To accelerate customer adoption, online vendors must boost awareness, promote more effectively the benefits of online personal productivity suites, entice collaboration users to use online document creation tools, and assure that their solutions will be compatible with Microsoft Office.

About the Study

This report includes a brief overview of the personal productivity software market, and summary of the competitive landscape. The report then delves into the results of AMI's focused research to examine the results of AMI's April 2007 phone survey designed to understand small businesses' readiness and willingness to consider and adopt online solutions. Respondents were sourced from AMI's proprietary U.S., U.K., Brazil and India SB customer lists (1 to 99 employees). To qualify for the survey, respondents had to be IT decision makers, work for firms that use the Internet, and have at least one PC. 60 interviews were completed in each of the four countries, for a total of 240 completed surveys.

The report examines and analyzes the results of this survey, including:

* Awareness among SBs of online personal productivity applications.

* Current drivers and inhibitors that steer SBs to or away from adopting both online and packaged personal productivity solutions.

* Propensity to currently use, and their plans to use, individual personal productivity solutions in a Web-based, online services model.

* The role of price elasticity in consideration and adoption of online versus packaged personal productivity applications.

* Customers' willingness to accept advertising in exchange for free online services.

The report concludes with AMI's perspective on the market, and key implications for Microsoft, Google, and other online challengers.

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 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.