SMB

With over 50 million units, India has the largest number of SMBs across the world. Indian SMBs are significant in terms of not just size but also revenue contribution to the economy. More than one-third of India’s GDP is attributed to the SMB sector. The SMB segment is definitely going to play a key role in India’s growth story as future unfolds itself. Indian SMBs are already trotting the globalization path and contribute nearly 40% of our exports. Simultaneously, increasing number of global companies are being attracted towards India as the country presents a large consumer population and also provides the right environment for business expansion. However, globalization also brings along several challenges with it and the SMBs often bear the brunt. While our SMBs are able to effectively compete with global players on parameters such as value for money and timely deliveries, they often lose out to opponents due to lack of technology adoption, especially IT in their businesses.

One look at the figures for PC adoption by SMBs is enough to laden this argument. Only one-fifth of our SMBs use PC in their business operations. There is hope in the fact that more SMBs are adopting PCs by the day and by 2012, nearly 40% of our SMBs would be penetrated with basic IT. Most of this growth will come from sectors such as manufacturing and professional services. Increased PC adoption within this vast base will create new opportunities for information technology products.

Retail represents more than one-third of the total SMB segment in terms of both size and revenue. Retail is one of the most diversified sectors and especially in India, it includes various dimensions of the retail format such as street vendors, the corner stores, and most recently the large format stores. Indian retail industry is on the upsurge and will witness increased IT/ software adoption to remain competitive in the market place. Talent attrition and increased usage of plastic money in transactions is pushing Indian retailers to adopt basic technology such as credit card swiping terminals and POS terminals for faster invoicing and enriched customer experience. The unorganized sector is not far behind in terms of adoption and presents ample opportunities for IT companies. Companies should focus on building solutions that can address the retailers’ pain points across the value chain of sales and inventory management.

Manufacturing is the next biggest sector among SMBs with around 11 million units (excluding artisans). The mid-sized manufacturing units hold large potential for the growth of ERM software. The Manufacturing industry is one of the biggest consumers of ERM software and is used to manage supply chain, logistics, warehousing, order management, material movement and processing, inventory management, accounting and payroll, production outflow etc. to improve business profitability. Deployment and implementation of ERM packages is relatively easier and the cost and time overrun is lesser compared to other verticals since the users are adept with required technical expertise.

Adoption of SaaS and open source-based ERM applications are further fuelling these opportunities. The growing SMB sector in India will bring in the initial opportunities for Indian storage software product companies. Innovation in delivery models such as storage as a service can help IT companies to penetrate the SMB potential. Disruptive innovations in technology, revenue and delivery models are helping unlock significant potential of SaaS.

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