SMBs in Singapore to spend $ 3B on ICT in 2008

SINGAPORE: Small and medium businesses (SMBs, or companies with up to 999 employees) in Singapore are set to invest a whopping US$3 billion this year to strengthen their information communication technology (ICT) infrastructure, up 6 percent over last year’s level. Telecom will contribute up to US$1 billion to the 2008 total, according to the latest study by Access Markets International (AMI) Partners..

“A sizeable number of small businesses (SBs, or companies with up to 99 staff) in Singapore have crossed the first wave of IT adoption, which involves building the basic IT infrastructure, such as deploying PCs, using basic accounting and productivity tools,” says Balaji Sreedhar, Singapore-based research analyst at AMI-Partners. “They are now in the second wave of IT adoption, which focuses on connecting within the enterprise, such as using local area networks and servers. The third wave involves increasing connectivity outside the enterprise, such as with suppliers, resellers, channel partners, and customers, according to AMI’s Three Waves of IT Adoption.”

To connect and extend their enterprise this year, SMBs will spend about 20 percent of their IT budgets on software, security, storage and networking. The bulk of telecom spending will be on services, with SBs accounting for up to 75 percent of Singapore’s total ICT spend.

The top three priorities for SBs in Singapore in the next 12 months are deploying in-house or hosted data backup and disaster recovery solutions, enhancing IT security, and boosting Internet or networking bandwidth or connection speeds.

For MBs, the top two priorities are the same as with SBs. The third priority is enhancing IT storage solutions in terms of storage capacity and storage management. “SMBs in Singapore have been increasing their headcount due to a robust economy and this is driving them to increase their Internet bandwidth, enhance IT security and add more storage in the next 12 months,” says Sreedhar. “Top challenges faced by SBs include tough competition, improving company profitability and more demanding customers. Apart from tough competition and improving company profitability, finding and retaining talented staff is a key challenge for MBs.”

SMBs in Singapore typically like to make ICT purchases by understanding the total cost of ownership (TCO), buy scalable solutions which meet the growth of their businesses and opt for solutions which align with their overall business strategy and processes.

The top three vertical sectors contributing to ICT spending across Singapore are wholesale, manufacturing and professional services (which include financial planning, billing and record keeping). These three verticals will contribute more than 50 percent of ICT spending in Singapore this year.

“SMBs in Singapore will continue to spend on ICT technologies this year provided the economy remains robust,” Sreedhar says. “Therefore it is essential for ICT vendors to keep close tabs on the pulse of the SMB market to better understand the ICT needs of this dynamic market.”