India SMBs to spend US$1.04B on networking

BANGALORE, INDIA: India small and medium businesses (SMBs or companies with up to 999 employees) are on track to spend US$1.04 billion on networking products and services this year, up by 11 per cent over 2008. Medium businesses (MBs or companies with 100 to 999 employees) will be generating a major portion of this spending accounting for nearly 59 per cent  of the total SMB networking expenditure.

The growth in networking spending among small businesses (SBs or companies with up to 99 employees) will be spearheaded by wireless networking. The estimated growth level is down amid this current economic slowdown, but is still much better than other geographies. The number of LAN-based businesses for the SMB sector in India will have a marginal growth of 12 per cent in 2009.

New technologies will impact the vendors and the channels that offer networking equipment. “2009 will be a challenging year for the channels, especially the networking channels. Advancements in WAN optimization, hosted unified communications, network access control and wireless 802.11n protocol will help the channels attract the attention of the SMB sector,” said Sumeeta Misra, Research Associate with AMI-Partners.

The market for WAN optimization is expanding, as businesses deploy more robust infrastructures. WAN optimization will help SMBs grow rapidly even during this downturn as it helps improve the network performance without the need to purchase additional, expensive hardware. WAN optimization also helps accelerate applications accessed by network users and improve the speed of massive data transfers.

“By deploying such technologies, SMBs are looking at cutting costs, making data protection faster and cheaper, realizing better ROI, thereby reforming the business and preparing it for the future,” he said. The number of WAN-based businesses for India SMBs will show a significant growth of almost 20 per cent in 2009.

The economic slowdown will provide a demand for hosted unified communications and Collaboration solutions by India SMBs. Many vendors have come up with these solutions for the SMB sector to provide them with a cost-effective way of communication. Collaboration is also now spreading across companies between multiple sites, customers and other partners. To achieve this, hosted unified communications and collaboration solutions are on the rise. The structural design supporting this shift is based on the network, and can effectively integrate all network requirements to have a flawless collaboration experience.

SMB market is attracted more to on-demand collaboration applications and network-based solutions for delivering a seamless business-to-business partnership. Hosted VoIP is expected to grow at almost 10 per cent in 2009 over 2008.

The shift in the SMB sector towards an Internet-enabled business model has given rise to the adoption of network access control. By having a security doorway at the entrance of a network, allows the administrator to have a comprehensive control over endpoints, with a variety of access methods such as LAN, wireless access methods, remote access and over the WAN. “More and more businesses are turning to the Internet for running their operations. This has resulted in an increased focus on network security,” said Misra.

This year will also see the start of broad-based adoption of the 802.11n protocol to deploy new wireless applications. The protocol momentum would help organizations better manage and secure access points. SMBs in India can invest in technologies that can help them reduce cost and improve their overall performance and getting them to be more competitive. VoIP over Wi-Fi will attract the interest of SMB sector.

The most promising technology will be the next generation of Wi-Fi: 802.11n. Verticals like logistics, manufacturing and retail can immediately leverage advanced 802.11n wireless connectivity to provide high performance and reliable wireless control and tracking solutions and will be the early adopters.

The network is becoming more intelligent due to emergence of new technologies like virtualization, embedded software on open platforms and software-as-a-service (SaaS) model. SMBs will show an increased focus on services and applications delivered over a robust network infrastructure.