SMBs driving the economic recovery of the US: Zinnov

BANGALORE, INDIA: Zinnov's latest study revealed that 28 million US SMBs contribute to 42 percent of the non-agriculture GDP and generate 50 percent of the total employment in US. The SMB sector is on a fast track growth in the US, overall SMBs in the United States are expected to grow $575 billion additional revenue and employ 23 million additional people by 2020, says the study.

As per the study, a total of 28 million SMBs are operating in the US are realizing collective revenue of $2.1 trillion. The SMB market is fragmented across verticals- retail, professional services, construction and healthcare together contributing to 50 percent of SMB revenue. Maximum contribution is made by medium size firms which constitute to only 2 percent of SMBs while they generate a massive two third of SMB revenue valued at $1.4 trillion.

The study also highlights the fact that SMBs in the US have a remarkable level of technology infrastructure with massive addressable IT opportunities. The overall ICT spend by US SMBs is valued at $265 billion out of which telecom spend is valued at $125 billion and IT contributing to $140 billion.

Praveen Bhadada, director Market Expansion, Zinnov said: "The total addressable IT opportunity with US SMBs stands at $263 Bn, which is 88 percent more than the current market of $140 Bn. Cloud and Mobility are driving IT investments by SMBs in the United States. Today 90 percent of SMBs have access to smartphones while 65 percent of them access data through tablets. We see a huge potential in software and services market to grow the spending in IT."

At present 25 million SMBs have internet penetration and 23 million businesses have access to broadband connectivity. On the other hand, PC and smartphone ownership is at par at 25 million, while tablet ownership is at 18 million. Cloud computing is emerging as a core focus area for SMB IT investments in the US. At present the cloud market in US SMB is valued at $19 billion and it is expected to increase to $32 billion by 2016.

South US states - led by Florida, Texas, Georgia - constitute more than one third of US SMB activity