Networking major Cisco Systems India is considering the huge opportunity that awaits in IT spending by small and medium enterprises (SME) in 14 non-metro markets, reports Live Mint. The total size of these markets is estimated at about USD400 million.
Cisco has increased its research capabilities to develop products specific to India. Internationally, Cisco has spent as much as USD100 million on product development for small businesses.
Pramodh Menon, president, partner business group of Cisco India and South Asia stated: “We are hoping that more and more of that R&D spend comes to India.”
As per a recent survey by research firm Zinnov, IT adoption in the SME segment is growing at the rate of 15 percent, and it is expected to reach USD15 billion by the year 2015. The study has concluded, though, that only 20 percent of the total 50 million SMEs in India are technology-ready today.
Rana Gopal, market analyst, International Data Corp. ’s India unit, stated: “IT services will continue to grow amid any economic downturn. Non-metro markets will be the key in expansion plans and growth strategy.” Analysts believe that managing an unorganised market like SMEs would be a challenging job, in spite of their high potential.
Mohit Rana, partner with consultancy firm ATKearney, stated: “SME is a single location business and hence you need a strong network of resellers and distributors along with serviceable touch points, so you may need a strong third-party network to manage the front-end (transactions). We do see an appetite from this segment to buy more (IT) solutions, but the price points could still be an issue.”