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SMBs in Tier II cities to spend US$9 billion on IT by 2017

SMBs in Tier II cities account for more than a fifth of all SMB IT Investments; says AMI Study Kolkata, India December 12, 2013 India-based SMBs (Firms with 1-999 full-time employees) are keen to leverage technology to enhance employee productivity & collaboration, and are forecasted to display a healthy CAGR of more than 15% over the next five years in boosting their ICT infrastructure. SMBs within the Tier-II cities contribute a significant proportion of the all-India SMB IT spending. These findings have emerged from a soon-to-be-released study by New Yorkbased Access Markets International (AMI) Partners, Inc. titled India SMB City Opportunity Analysis an IT-based Forecast Model As the Indian economy gradually shrugs off the effects of the downturn and begin to show a boom in many sectors triggered by innovative economic and investment policies, the metros or the Tier I cities are the ones that are primarily inundated with burgeoning investments in the industrial and services sector. The building-up congestion in realty structures and a huge burden on the overall city infrastructure has forced respective governments and many companies to seek out alternative smaller cities for their future, and earmark investments geared towards Tier II and III cities. Hence second-tier cities like Kochi, Trivandrum, Nagpur, Vadodara, Vizag etc. form the next rung behind eight metros (Delhi, Mumbai, Bangalore, Chennai, Hyderabad, Kolkata, Ahmadabad & Pune) and are anticipated to ride the growth wave in areas such as formation of new businesses and expansion of current businesses. Consequently, it is predicted that the IT investments by SMBs within these cities will also intensify. AMI-Partners study also reveals that SMBs in Tier-II cities exhibit a substantially higher growth-rate in terms of their IT spending compared to their compatriots in Tier-I cities; thus they are likely to be the future growth-engines of SMB in terms of IT spending. In addition to investments in basic IT infrastructure, SMBs in these Tier II and III cities are anticipated to leverage the Wave II & III technologies (as per AMI-Partners Proprietary Three-Wave Technology Theory) and Cloud Computing in a bid to expand their business regionally & globally and also to gain a competitive edge over their peers," says Mr. Subrata Sarkar, Senior Analyst at AMI-Partners. This translates to a forecasted spend of around US$9 billion by SMBs in the Tier II & III cities alone in various areas of IT - such as Server, Storage, Software and cloud based services. AMI also finds that the share of Tier-II city SMBs within the all-India SMB IT spending is on the rise -the current 26% contribution of SMBs within these cities is likely to rise by approximately two-three percentage points within the next five years, as predicted by AMI analysis. ICT vendors should therefore, definitely look outside the metros to tap into the second- and third-tier cities across the country for marketing their products and services. "As second tier cities will contribute a bigger slice to the IT market pie in next few years, it is only natural and essential for IT vendors to plan for entry into other nascent cities in India, Mr. Sarkar says. The sooner ICT vendors realize this and act; the better will be their prospects going forward. Related Studies: AMI-Partners study, titled India SMB City Opportunity Analysis an IT-based Forecast Model, provides a detailed picture of IT adoption and spending patterns in the SMB space around 100 different ICT technology sub-categories for top 20 Tier II/III cities in India. These top 20 cities have been prioritized using a comprehensive method based on a number of indicators; each city is rated and ranked vis--vis its performance on these indicators. The report provides a complete view of the number of SMBs as well as their spending on various technologies including wireless LANs, IP PBXs, VoIP, IT services, storage, IT security, VPNs/firewalls, intrusion detection, CRM, ERP/SCM, cloud services. These data points are examined in depth across the 2012 to 2017 timeframe. The study also provides drill-down views of each of these technologies

by small business (1 99 employees) and medium business (100 999 emp.) segments, and serves as the IT industrys most comprehensive city-wise SMB market planning tool in India. For more information about this study, AMI-Partners, or our global SMB research, call 212 944 5100, e-mail ask_ami@amipartners.com or visit our web site at 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 intelligencewith a strong focus on global small and medium business (SMB) enterprises 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 over the last ten years. 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. Media Contacts: Quoted Analyst: Subrata Sarkar: Phone: (91) 33 4003 3093 ext 213. Email: ssarkar@ami-partners.com Media Relations: In US (New York): Nancy Carty. Phone: (212) 944 5100 ext 581. Email: ncarty@ami-partners.com In EU (London): Hugh Gibbs. Phone: (44) 7899 757417. Email: hgibbs@ami-partners.com In Asia Pacific (Singapore): Abhilash Pillai. Phone: (65) 6220 5535 ext 101. Email: apillai@ami-partners.com In India (Bangalore): Rati Ghose. Phone: (91) 80 4148 2661 ext 37. Email: rghose@ami-partners.com In India (Kolkata): Jyoti Singh. Phone: (91) 33 4003 3093 ext 223. Email: jsingh@ami-partners.com In India (Mumbai): Neha Jalan Goenka. Phone: (91) 99300 20420. Email: njalan@ami-partners.com