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IT spending by SMEs to grow to USD 15 billion by 2015

 
SMEs open to technology adoption: a Zinnov study

Indian SMEs would be contributing to over a third of the total IT expenditure in the country by the year 2015, according to a report, "Indian SMB ICT Adoption Insights," by advisory firm Zinnov.

The report also predicts that overall domestic spending on IT will grow at a CAGR of 12% and will reach $36 billion by 2015. IT spending by SMEs would grow to $15 billion by the same time.

The Zinnov study indicates that 10 million of the 50 million SMEs in the country today are ‘technology-ready’. Interestingly, 94% of these – 8.9 million SMEs – are extremely small in size, with an employee strength of less than 10.

Five lakh Indian SMEs presently have Websites, and two million are accessing the Internet, the study indicates.

Four million SMEs are using PCs, which the study predicts will grow at 30% till 2015, resulting in doubling the number of SMEs with PCs, according to a BizTech2 article that quotes the Zinnov report.

On individual segments of the SME sector the Zinnov study concludes that retail is the largest vertical that is ready for technology upgradation, where a whopping two million firms are up for technology adoption and expansion. Professional services firms come a close second, with about 1.9 million ‘technology-ready’ firms, followed by the manufacturing sector with 1.2 million firms, and then the hotels and restaurants sector with one million enterprises.

By the year 2015, the study states, retail will stand at 2.5 million, professional services at 2.3 million, and manufacturing at 1.6 million, while hotels and restaurants at 1.1 million units. The education sector is not too far behind with 0.9 million units presently, which is expected to grow to 1.1 million units during the same time frame. The major challenges faced by SMEs in terms of IT adoption are a lack of technological know-how, unclear return on investment and high cost for technical support, among others, the study stated. There are still a large number of SMEs that consider the adoption of IT as a time-consuming and complex procedure and prefer to use the traditional ‘pen and paper’ systems.

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