22% SBs to acquire PCs this CY

Nearly 22 percent of SBs (small businesses, or companies with up to 99
employees) in India have plans in the next 12 months to invest in computers for
the first time. This is likely to add over half a million non-PC SBs (SBs with
no computer adoption) to the existing PC SB universe within India. This will
also boost spending in other IT categories such as software, services, security,
etc, according to a recent study by New York-based Access Markets International
(AMI) Partners, Inc.

“In the current economic downturn, businesses are looking at cutting costs,
and as a result PC-owning SBs are extending the life-cycle of existing PCs,”
said Dipendra Mitra, Analyst, AMI-Partners. “The non-PC owning businesses hold
the key to growth in India. Even if a fraction of the 2.5 million non-PC owning
businesses buy a PC, it will provide a considerable boost to the Indian IT
industry,” he added.

SMBs are a vital part of the Indian economy and a major contributor to
India's GDP. Yet, only a little more than a third of all SBs actually own and
use a PC. One key reason for this is the lack of awareness of the benefits of
PCs among SBs. A recent AMI survey found that more than 55 percent of the SBs
view PCs as having no relevance to their line of business, and nearly a third
have not even considered buying a PC.

“However, this attitude is changing as non-PC SBs realize the benefits of
computerization. About a quarter of these non-PC SBs say PCs will make their
business look more professional. And one fifth of these non-PC SBs say PCs will
increase the productivity of their employees, and the resultant business
automation will boost efficiency. A considerable proportion of these businesses
are likely to be first-time PC buyers,” said Mitra .

When asked about their channel preference for future PC purchase, 90 percent
of non-PC SBs in India said they preferred to buy from the local computer store.
Retail computer stores offer many advantages, such as convenient options of
buying over the counter, selecting from multiple brands and models and a chance
to weigh the pros and cons of each PC model or brand.

Local resellers/system builders/box-pushers (also known as value-added
resellers or VARs) are the second preferred channel for future PC purchasers
among the non-PC SBs. This is mainly due to their personalized service and
support. “Non-PC SBs need considerable hand-holding in the initial stages of PC
adoption, in terms of installation and occasional troubleshooting,” Mitra added.
“Those are exactly the strengths of VARs.”

AMI surveys have identified a distinct category of non-PC SBs which are
categorized as 'Concerned Non-PC SBs.' These are defined as SBs which have
expressed their concern with the current economic scenario and state that
general business conditions will get worse in the next 12 months. This segment
of Concerned Non-PC SBs demographically earns higher revenues, makes quick
decisions, has a larger branch network, a bigger mobile workforce, and is thus
more concerned about the current economic downturn.