France SMBs invest 20pc in IT services: AMI

NEW YORK, USA: France SMBs (small and medium businesses, or companies with up to 999 employees) closed the year by spending more than $34 billion to build up their IT and telecom infrastructure and applications, according to new research by AMI-Partners.

France SMBs remain the third IT and telecom market in Western Europe (after Germany and the United Kingdom) and account for approximately 16 percent of all dollars spent in the region.

AMI estimates that there were more than 1.95 million SMBs in France in 2008 with more than six out of seven firms incorporating computers for their day to day business operations. “When it comes to IT spending, France small businesses (SBs, or companies with up to 99 employees) spend the most on the computing category, which is the stepping stone to build further infrastructure,” says Pauline Courtiau, New York-based Analyst at AMI-Partners.

“Medium businesses (MBs, or companies with 100 to 999 employees) that already have a well developed infrastructure allocate the largest part of their budget on IT services in order to leverage their infrastructure,” Courtiau added.

A top priority for France SMBs this year is the implementation of ERP and CRM as networked applications that help manage internal processes and external customer/supplier relationships. Furthermore, the current economic climate is driving SMBs to streamline their operations and tighten relationships with customers and partners. Another priority is to deploy virtual-private networks (VPNs) which will result in greater security of dataflow across the firms.

“Among all SMBs, France micro SBs (fewer than 10 employees) distinguish themselves from others by their lack of IT management,” said Courtiau. “Usually these smaller firms have a restricted cash flow and many of them decide to save on technology management. Larger SMBs, on the other hand, prefer not taking such risks; hence more than four out of five SMBs with 10 to 999 employees have one or more employee either full- time or part-time dedicated to technology service & support.”

When France SMBs decide to acquire new products and services, their top purchase preferences are to “develop and formalize a process by which they purchase IT products and services” and to “continue purchasing IT brands they currently use”.

Many people within the firm are contributing to the purchase process; hence business owners have the highest propensity to identify the need; Non-IT senior management primarily specify a configuration; while, in-house IT personnel mostly select a brand. For the final purchase decision making, SBs’ industry associates and MBs’ business owners are the main players.