IT Spending by Indian SMEs Expected to Reach $900Mn in ’07 – AMI

According to a study conducted by AMI Partners (a US-based market research company), IT spending by Indian small and medium enterprises (SMEs) is expected to reach USD 900 million in 2007, reflecting an increase of 19 percent over 2006. IT spending by Indian companies includes both product support and professional services.

Among the key findings, the long-term managed services in the Indian market are strengthening, while the traditional services, such as applications development and integration are losing their foothold. The managed IT services in the country comprises end-to-end outsourcing and discrete managed services. Currently, the maximum amount of investment by Indian SMEs is made in discrete managed services.

According to Nirupam Chaudhuri, the Research Manager at AMI Partners, the managed IT service market in India is growing at a faster rate than the average market growth. He further added that a good relationship between both the sides is essential with a single point of contact for dealing with various issues regarding IT infrastructure and facilities.

Till now, a majority of Indian SMEs have spent heavily on annual maintenance contracts (AMC) for hardware and software applications. These annual service contracts are likely to mature into distinct outsourcing deals, where the service provider will deliver risk sharing, round-the-clock support, and facilities management services.

The competition among vendors delivering desktop management and routine network management services is enormous in India as the number of contracts in this domain is increasing. In addition, the contracts regarding FCAPS (fault, configuration, accounting, performance, and security)-based network management are increasing.