KOLKATA, INDIA: Nearly 22 percent of SBs (small businesses, or companies with up to 99 employees) in India have plans to invest in computers for the first time in the next 12 months. 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 at 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."

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," he added. "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."

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 said. "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.