India SMBs To Spend US$1.04B on Wireless Networking in 2009, Despite Slowdown
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% 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% 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% in 2009.
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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,” says 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,” says Ms. Misra. The number of WAN-based businesses for India SMBs will show a significant growth of almost 20% 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% 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,” says Ms. 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. Small and medium business 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.
Related Studies
AMI-Partners’ 2008-09: India Small Business Market Overview – Impact of Economy: Changing Dynamics, Opportunities & Challenges and 2008-09: India Medium Business Market Overview – Impact of Economy: Changing Dynamics, Opportunities & Challenges studies highlight major trends in the context of current/planned IT, Internet and communications usage and spending. Based on AMI-Partners’ annual surveys of SMBs in India, the studies track a broad spectrum of issues pertaining to budgets, purchase behaviors, decision influencers, channel preferences, outsourcing, service and support. Also covered are detailed firmographics and critically important technology attitudes and strategic planning priorities. This data points to key opportunities and messaging hot buttons for vendors and service providers seeking to match their offerings to SMB market requirements.
In light of global recessionary fears and the impact of economic downshifts on business, AMI-Partners has expanded its tracking studies to include several questions pertaining to SMBs’ perceptions of their dependence on local, national and global economies as well as their expectations about economic growth. These questions gained added significance in light of the timing of this year’s studies, which overlapped with the global financial crisis starting in mid-September. AMI-Partners’ studies, thus, present an early picture of an SMB market undergoing a major transition. Given that many SMBs are at the leading edge of this transition, AMI-Partners has included an additional analysis in this year’s reports to assess demographics, attitudes, current IT adoption as well as planned IT purchases among “concerned SMBs” compared to the rest of the market. (AMI-Partners defines concerned SBs as those that expect the local/regional economy will get worse in the next one year and concerned MBs as those that expect the local/regional, national or global economy to get worse in the next one year.)
For more information about this study, AMI-Partners, or our global SMB research, call 212-944-5100, e-mail or visit http://www.ami-partners.com.
About Access Markets International (AMI) Partners, Inc.
AMI-Partners specializes in IT, Internet, telecommunications and business services strategy, venture capital, and actionable market intelligence — with a strong focus on global small and medium businesses (SMBs), and extending into large enterprises and home-based businesses. The AMI-Partners mission is to empower clients for success with the highest quality data, business strategy perspectives and “go-to-market” solutions. Led by Andy Bose, the firm has built a world-class management team with deep experience cutting across IT, telecommunications and business services sectors in established and emerging markets.
AMI-Partners has helped shape the go-to-market SMB strategies of more than 150 leading IT, Internet, telecommunications and business services companies. The firm is well known for its IT and Internet adoption-based segmentation of the SMB markets; its annual retainership services based on global SMB tracking surveys in more than 25 countries; and its proprietary database of SMBs and SMB channel partners in the Americas, Europe and Asia-Pacific. The firm invests significantly in collecting survey-based information from several thousand SMBs annually, and is considered the premier source for global SMB trends and analysis.