SMBs: What lies ahead in 2009?

Outlook 2009

SMBs: What lies ahead in 2009?

Rajeev Mittal, Group Director, Small and Medium Enterprise, Microsoft India

Thursday, December 18, 2008

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NEW DELHI, INDIA: What are the trends which are going to be the hallmark of the small and medium businesses (SMBs) in the year ahead? How can they best leverage the opportunities which the year will bring their way? The ripple effect of the recession in the US economy is now visible across the globe though the eventual magnitude and duration of the impact is nebulous at the moment but what has become apparent is that as the year draws to an end a significant number of businesses in India especially SMBs will need to realign their priorities so as to stay healthy in the changed economic scenario.

Rajeev Mittal, Group Director, SME, Microsoft India

Rajeev Mittal, Group Director, SME, Microsoft India

The larger part of the trends in the year 2009 are going to be influenced by the recent economic scenario. Most analysts are unanimous in their belief that All organizations will re-assess their spending in the wake of the global economic crisis. They will modify their IT strategy from a focus on revenue generation/growth to an approach aimed at improving operational efficiencies and cost savings. According to an AMI Partners study, a majority of Small Businesses in India feel that the economy, will have an impact on their business over the next twelve months. Almost 80 percent believe that the local economies will impact their business–with around 60 percent feeling it will have a very strong impact. While a lesser proportion of SBs feel so about the impact of that the global economies Springboard differs here and actually places India among countries which will run a lower risk as far as a significant IT spending slowdown in 2009 is concerned along with China and Vietnam.

Liquidity seems to be the topmost challenge for SMBs going and likely to remain a priority into next year. IDC believes that SMBs are more likely to focus IT investment on tactical projects, which deliver immediate benefits, than strategic projects. Clearly the immediate and near future is the focus of the SMBs –so what are the technology investments which they will be looking at are those which will stand them in good stead at the moment. According to AMI Partners the lease/finance model will also start seeing more adoption

According to Springboard, cost concerns will drive a primary focus on IT infrastructure consolidation among more mature SMBs, especially mid-market organisations. The need for increasing efficiencies will help virtualization emerge as key to data center transformations. With the current times demanding innovation in the area of consolidation virtualization is one vital device which will help SMBs on their quest for optimizing efficiency. Virtualization can help customers dramatically reduce their IT infrastructure costs and enable organizations to save their IT costs through server consolidation, disaster recovery, re-hosting of legacy applications and software test and development. The awareness levels on virtualization amongst SMBs is still at a nascent stage but going forward more SMBs are expected to embrace this technology.

Unified communication solutions will become more adopted and visible in 2009. Growth need for real time collaboration and mobile nature of workforce will give a boost to UC amongst SMBs in India. Communication remains one of the most strategic tools for productivity and managing various stakeholders in the business. As travel expenses and communication costs are trimmed by companies, Unified communication solutions tailored for SMBs will increasingly emerge as “value ” and will see strong growth in the upper mid market segment (AMI P). IDC also believes that audio/video/web conferencing categories will have high anticipated growth, while traditional telecom services such as local/long distance will still continue to make up the bulk,

Mobility is already come of age and grow even more in 2009. AMI Partners make an interesting comment on how with employee productivity and wireless connectivity becoming top priority for businesses the adoption of notebooks will increase as compared to desktops. Portable devices such as data capable mobile handsets will also see traction across employee sizes and verticals.

There has been a fairly contained engagement of SMBs in e-commerce in India till now, but going forward, SMBs will leverage Web marketing and online tools, that can help them expand their market reach. E-commerce adoption is also likely to see interest and exploration by SMBs as an added transaction medium, in B2C and exports scenarios.

Parallel growth in e mail volume and electronic will see increased demand for data back-up and storage, buoyed by decreasing hardware prices . Analysts believe that storage requirements will go up in the coming year and will be one of the top drivers for IT investments. While in an increasingly vulnerable social and business environment, businesses will look at making their infrastructures robust and as infallible as it can get as lapse on this front will become an unaffordable risk. AMI Partners places security amongst the fastest growing IT areas for 2009.

Software plus services had come centre stage last year and going ahead cloud computing will acquire greater relevance as businesses look at reducing their CAPEX and the costs involved with implementation and use of technology solutions. Springboard reiterates that cloud computing movement will gain momentum in Asia. Managed services though, according to AMI Partners will not be among the most preferred options by SMBs and spending on them is expected to grow at a slower rate.

The coming year will see a change in the larger paradigms within which SMBs operate - Broader global and local economic and political challenges will lead to a tightening of regulations, compliance leading into mandates for stricter IT governance. The governments are expected to begin to more proactively engage with this businesses , including SMB which is really the backbone of every economy.

The engagement will also scale be in terms of offering easier access to finance and lowering of interest rates. It is imperative on larger IT Vendors to emerge in the role of an advisor to SMBs and hand hold them through the current times on their tryst with information technology. While these businesses look at increasing efficiencies, technology spending may not increase at same pace as prior years, but it will certainly remain a tool more resilient than others to offer the partnership that SMBs seek in tough times.

©CIOL Bureau

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