SMBs in APeJ to spend US$394M on UC in 2008

SINGAPORE: Small and medium businesses (SMBs, or companies with up to 999 employees) in the Asia-Pacific region outside of Japan are set to spend US$393 million on unified communication (UC) solutions in 2008, up 6 percent over 2007, according to a new study by Access Markets International (AMI) Partners, Inc. The region accounts for 11 countries - Australia, China, Hong Kong, Indonesia, India, South Korea, Malaysia, Philippines, Singapore and Thailand.

"As the economic crisis looms, SMBs are thinking about cutting costs and boosting customer service strategies to gain a competitive advantage," says Gina Luk, AMI's Singapore-based consulting and research manager. "SMBs are increasingly exploring lower cost, simple to manage, and easy to implement integrated UC solutions from vendors and service providers."

Interestingly, both medium businesses (MBs, or companies with 100-999 employees) and small business (SBs, or companies with up to 99 employees) will spend almost the same on UC solutions. Of the US$394 million to be invested on UC across 11 countries in APeJ this year, 51 percent of it will come from MBs, while 49 percent will come from SBs. Conferencing and collaboration tools such as audio, video, web conferencing and instant messaging will account for the bulk of 78 percent of the total UC spend.

"UC is still at a nascent stage for many SMBs in emerging markets such as Malaysia, Thailand, Vietnam, and the Philippines," Luk says. "The adoption rate of UC solutions is relatively low in these markets. The four countries contribute about 8 percent of total APeJ UC spend." Even in more developed markets such as Hong Kong, New Zealand and Singapore, SMBs' UC spending will reach only 7 percent of total APeJ UC spending, China, South Korea and India have been on the top hits charts for the past three years, and will account for 61 percent of the total SMB UC spending in 2008, followed by Australia and Indonesia at 14 percent.

With varying communications formats, and with increased mobility, SMBs are looking more at UC solutions to address business challenges. "Many SMBs in APeJ are aware of UC, but they would however need to justify the cost of going on a 100 percent UC platform," Luk says. "Given the current global economic downturn, SMBs are concerned about costs and the extra resources required to support UC services and solutions."

But then businesses still need to ensure that their employees communicate with customers, suppliers, and colleagues via multiple devices and as efficiently as possible. "Not surprisingly, SMBs want all UC features at lower costs," she adds.

Luk says. "SMBs want to be able to call someone on their mobile phone or reply to an email right away, and UC can help them to do more for less."

Singapore SMBs want to see UC solutions linked to their business goals such as enhanced customer experience and business continuity. Since SMBs mainly use internal funds for ICT investment, they are careful about spending. Although SMBs are positive about growth, they would also like to see products that are scalable. Vendors need to demonstrate that they can work with SMBs by offering simple to manage and easy to implement integrated and low-cost UC solutions.

AMI believes UC is a lucrative sector, as evidenced by global leaders like Cisco Systems, Microsoft, Avaya, Alcatel-Lucent, IBM, Nortel, and NEC, all pushing hard into this space. This is creating the potential for some intriguing market-share battles to come in 2009 and beyond. As different forms of communication continue to proliferate, customers are going to need a single point of contact for their interaction, and will look to one or two of the many vendors in the marketplace to deliver on their unified communications requirements.