AMI-Partners estimates that 40 percent of small businesses in India plan to invest in computers for the first time in the next 12 months. This opens a huge opportunity for PC and related hardware, software and solution vendors. Over a million SBs, out of a total of 2.7 million SBs in India, do not own any computers, according to the latest study by Access Markets International (AMI) Partners. About 15 percent of the non-PC owning SBs surveyed said they would opt to buy laptop PCs, instead of a desktop.

“There are still 2.7 million businesses in India, which do not own computers -- and a major proportion of them belong to the wholesale and retail sector,” says Dev Chakravarty, Senior Analyst at AMI-Partners. “Almost 50% of these SBs say PCs have no relevance to their line of business. But this attitude is beginning to change.”

About 15% of non-PC owning SBs surveyed by AMI said they would opt to buy laptop PCs, instead of a desktop. “The need for laptops is a direct consequence of the burgeoning mobility needs of India’s non-PC SBs,” Mr. Chakravarty says. “The proportion of overall India SMBs with mobile employees rose to 41% in 2006, a rapid rise by nearly twenty percentage points over 2005. At present, more than half of Indian SMBs have employees regularly venturing out of town to interact with business partners and will lug a laptop along.”

The most favored channel for PC-purchases is the local retail store. PC-purchase by Indian SBs is similar to consumers that buy white goods or electronic items; SBs prefer the ambience of retail stores where they can weigh the options of buying over the counter and check all the available brands and models.

Over 40% of SBs said their most preferred laptop or desktop brand is Hewlett-Packard. Most SBs base their buying decision on newspaper ads -- 65% of SBs said they rely on newspapers for gathering information about IT-related products. Next in line was the opinion of friends and family.

The crux is education, or lack of it. “PC vendors need to make greater efforts to educate SBs about the benefits of PCs and ROI that they may gain due to PC usage,” Mr. Chakravarty says. “Holding regular workshops for SBs and tying-up with IT training institutions can be some ways of increasing awareness. About 10% of SBs cited lack of PC operating knowledge as a reason for not buying computers. Some SBs cited lack of financing options as another barrier; interestingly, this concern was not highlighted by SBs in an AMI survey last year.”

The need to automate business processes and to improve efficiency are the two key drivers that non-PC SBs cited for buying PCs. The urge to keep up with competitors and increase employee productivity are some other factors. Maintaining a basic IT infrastructure is also necessary to manage mushrooming business growth and keep up with demands from business partners.

About the Studies

AMI’s 2006-2007 India Small Business Market Overview and Comprehensive Market Opportunity Assessment and 2006-2007 India Medium Business Market Overview and Comprehensive Market Opportunity Assessment studies highlight these and other major trends in the context of current/planned IT, Internet and communications usage and spending. Products and services covered include established and emerging hardware, software, applications and business process solutions. Based on AMI’s annual surveys of SMBs in India, the studies track a broad spectrum of issues pertaining to budgets, purchase behaviors, decision influencers, channel preferences, outsourcing, and service and support. Also covered are detailed firmographics and critically important technology attitudes and strategic planning priorities. These data point to key opportunities and messaging hot buttons for vendors and service providers seeking to match their offerings to SMB market requirements.

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