Most
large technology companies may have so far focused primarily on bigger
enterprises, but a new report from market research firm Zinnov says
small and medium businesses present a lucrative opportunity of $11.6
billion (about Rs 71,300 crore) in 2015 and $25.8 billion in 2020.
As per the report, India has nearly 51 million such businesses, of which 12 million have a high degree of technology influence and are looking to adopt newer IT products. The report defines an SMB as a company with up to 1,000 employees.
These companies will be spending on IT products that include mobility, analytics, social media and cloud in order to increase their customer reach, manage customer relationships better, and ensure efficiency in operations.
The market research firm has said that although there is immense opportunity, the large IT vendors may have to fine-tune their approach towards this particular segment of the market.
"Vendors need to change their business models in order to target SMBs as their requirements are very different from those of a large enterprise," said Arvind Rawat, engagement manager at engagement manager at Zinnov. "SMBs cannot afford expensive software and therefore companies need to offer their products in a cloud-based freemium model."
In a freemium model, customers get basic software for free and pay for higher features. According to the report, SMBs require solutions that work equally well on mobile and are available in a pay-per-use model.
The report points out that vendors such as Google and Microsoft are putting a special focus on this segment through massive price cuts and newer business models to suit this market. Google, for example, reduced the cost of Google Apps by 45% in 2013, bringing the cost to just Rs 150 per user per month. Microsoft similarly cut prices for Office Mobile by 31% in 2014, making its base version available for free.
Adoption of IT across customers and push from ecosystem stakeholders is fuelling the demand from SMBs in India, the report said. Mobile app downloads in India will grow from 100 million in 2014 to 400 million by 2020, the research firm said.
"With growing mobile adoption, mobile app development is becoming increasingly viable for SMBs. There are over 9,000 mobile app development companies in India already," said Rawat.
As per the report, some of the companies that have been successful in catering to the demand from this sector include SMS-based website creation and management company NowFloats, missed call marketing company Zipdial, which was recently acquired by Twitter, and mobile-based point-of-sale company Ezetap.
As per the report, India has nearly 51 million such businesses, of which 12 million have a high degree of technology influence and are looking to adopt newer IT products. The report defines an SMB as a company with up to 1,000 employees.
These companies will be spending on IT products that include mobility, analytics, social media and cloud in order to increase their customer reach, manage customer relationships better, and ensure efficiency in operations.
The market research firm has said that although there is immense opportunity, the large IT vendors may have to fine-tune their approach towards this particular segment of the market.
"Vendors need to change their business models in order to target SMBs as their requirements are very different from those of a large enterprise," said Arvind Rawat, engagement manager at engagement manager at Zinnov. "SMBs cannot afford expensive software and therefore companies need to offer their products in a cloud-based freemium model."
In a freemium model, customers get basic software for free and pay for higher features. According to the report, SMBs require solutions that work equally well on mobile and are available in a pay-per-use model.
The report points out that vendors such as Google and Microsoft are putting a special focus on this segment through massive price cuts and newer business models to suit this market. Google, for example, reduced the cost of Google Apps by 45% in 2013, bringing the cost to just Rs 150 per user per month. Microsoft similarly cut prices for Office Mobile by 31% in 2014, making its base version available for free.
Adoption of IT across customers and push from ecosystem stakeholders is fuelling the demand from SMBs in India, the report said. Mobile app downloads in India will grow from 100 million in 2014 to 400 million by 2020, the research firm said.
"With growing mobile adoption, mobile app development is becoming increasingly viable for SMBs. There are over 9,000 mobile app development companies in India already," said Rawat.
As per the report, some of the companies that have been successful in catering to the demand from this sector include SMS-based website creation and management company NowFloats, missed call marketing company Zipdial, which was recently acquired by Twitter, and mobile-based point-of-sale company Ezetap.
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