ASEAN Emerging Market Small Businesses in First Wave of IT Adoption; AMI-Partner Study Reveals Thailand and Indonesia Small Businesses Exhibit 20%+ Compounded Annual Growth Rate in IT Spending From 2004 to 2007.

NEW YORK -- A Large Un-penetrated Market Remains While Early Adopters of PC Reap Benefits from Internet Connectivity and Networking

The small business (SB) segment in Thailand and Indonesia invested a total of $1.3 billion and $1.6 billion in IT, respectively, in the last 12 months. The context for this commitment to IT investment is a dramatic growth in GDP. Robust domestic demand resulted in a growth rate of 6.3% for ASEAN countries last year. Following the 1997 economic crisis, this is the second highest annual GDP growth--behind only the 6.7% achieved in 2000. It compares with a global GDP growth of 5.1%, and comes amidst a sharp increase in international oil prices and outbreaks of avian flu.

Another factor is that ASEAN governments have recognized that the success in promoting small and medium businesses (SMBs) is critical to long-term sustainable economic growth. SMBs drive 40% and 57% of the country's GDP in Thailand and Indonesia, respectively, and are each country's largest source of jobs. Both countries' governments have actively helped SMBs use technology to enhance competition.

Thailand and Indonesia SBs Show Strong Growth Ahead

From 2004 to 2009, investment in IT is expected to grow at a compounded annual growth rate of over 20% for Thailand and Indonesia SBs. "Currently, 50%-60% of their spending centers on procuring basic computing hardware," said Jackie Chan, senior analyst at AMI-Partners, based in New York. "These SBs are still in the first wave of IT adoption. The basic infrastructure must be built before they can advance to the next stage of networking and connectivity," continued Chan.

As such, Thailand and Indonesia PC-owning SBs plan to continue purchasing computers and printers in the next 12 months, while increasing their investment in Internet-related services. These SBs have set an aggressive revenue growth target of 6%-9% for the next 12 months and leveraging IT is key to successfully meeting their growth goals. At the same time, over 40% of SBs in these countries plan to hire more employees and many are planning additional branch locations as well, all of which are factors further generating demand for hardware and future connectivity.

Untapped Market Requires Help and Education

The Thailand and Indonesia SB markets remain lucrative opportunities for hardware vendors because of the largely un-penetrated markets. In Thailand, over 70% of all SBs have yet to adopt a computer. This number is even higher in Indonesia, where more than eight in ten SBs are yet to become PC users. "These SBs need help understanding how PCs can be applied to their individual business as they fail to see the relevance," commented Chan. They generally perceive computers to be somewhat useful for a few specific tasks like accounting and word processing, but fail to understand how IT can play a key role in their overall business strategy.

As such, investment outlay, in their perceptions, exceeds the benefits, and a decision not to adopt is subsequently made by these small business owners or senior managers. Furthermore, this untapped market is made up of smaller businesses with less employees and lower annual revenues. These less sophisticated businesses lack the resources and knowledge to install or support PCs, which is yet another inhibitor. In order for vendors to tackle this market, education and awareness building is a prerequisite and cooperation with government agencies will also prove fruitful.

About the Studies

AMI's 2005-2006 Thailand Small Business Market Overview and Comprehensive Market Opportunity Assessment and 2005-2006 Indonesia Small 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 SBs across Thailand and Indonesia, 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. These data point to key opportunities and messaging hot buttons for vendors and service providers seeking to match their offerings to SB market requirements.

For more information about this study, AMI-Partners, or our global SMB research, please call AMI-Partners at 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 -- 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 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.