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SMBs in Pakistan spent $1.5 B on ICT in 2007

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CIOL Bureau
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KOLKATA, INDIA: Small and medium businesses (SMBs, or companies with up to 999 employees) in Pakistan invested more than $1.5 billion on ICT (info-communications technology) in 2007. This spending has been fueled by a surge in the number of SBs (small businesses, or companies with up to 99 employees) as evidenced in the latest study by New York-based Access Markets International (AMI) Partners, Inc.

“SMBs in Pakistan are adopting basic technologies rapidly,” says Nilanjana Mitra, Research Analyst at AMI Partners. “Most of Pakistan MBs (medium businesses or companies with 100 to 999 employees) have already attained high usage levels in deploying PCs, printers, basic productivity software tools, antivirus solutions and using the Internet. All of Pakistan’s MBs currently use a PC to run their business and almost all of them are connected to the Internet.”

Spending on computing and Internet dominates the IT spending pie for SMBs, as they focus on building a strong IT infrastructure. MBs spend a greater proportion on networking compared to SBs, as MBs are eager to enhance connectivity technologies.

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“Only 14 percent of SBs in Pakistan have adopted computers at present,” says Mitra. “Nevertheless, this is more as an opportunity rather than a shortcoming. PC vendors can focus on this relatively untapped SB market opportunity in Pakistan to gain significant returns. PC-adoption plans are quite positive among SBs.”

More than one-third of SBs in Pakistan have indicated that they intend to purchase new PCs in the next 12 months. A sizeable proportion of first-time PC buyers are also likely to join in—thus boosting the overall SMB PC market.

“An uncertain economic environment and industry conditions are considered the most important issues hindering SMBs’ business growth in Pakistan,” says Mitra. “These factors are pushing SMBs to think of strategies to control costs while adopting newer technologies to keep up with competition.”

When looking at the vertical segments of Pakistan based SMBs, the FIRE (financial services, insurance and real estate) and professional services (accounting, advertising, data processing, engineering, legal and photography) are the more technologically advanced. These are followed by the manufacturing vertical segment.

“Together FIRE and professional services constitute 15 percent of all SMBs in Pakistan,”  Mitra says. “About two thirds of these two verticals own PCs, which is quite high compared to a total PC penetration (15 percent ) among all Pakistan-based SMBs. Comparatively, the retail sector represents 55 percent  of all SMBs, but only 8 percent  of the retail sector own PCs.”