Small and medium businesses (SMBs) in India are set to spend more than $45m on hosted applications in 2009, according to a new study by Access Markets International (AMI) Partners.
Medium businesses (MBs) are expected to account for over two thirds of the country’s total SMB expenditure, while small businesses are also increasing adoption of basic hosted applications, the firm said.
According to AMI partners, during these economic times, India SMBs are even more cost conscious than normal and hosted applications require no upfront investment in technology. They also require little or no allocation of time or resources for software deployment and maintenance.
The study revealed that hosted applications among SMBs have shown growth in last 12 months and is expected to continue as SMBs look to invest strategically while managing cash flow. In India, number of businesses adopting hosted application has grown 8% in 2009.
According to the study, India SMB spending on hosted CRM offerings is expected to grow over 10% in 2009; hosted ERP/SCM expenses are anticipated to rise at a marginally lower rate; and applications that enable business process transformation are experiencing double-digit growth. Other applications that can be hosted include project management, billing, accounting/ financial, merchant services, inventory management, messaging and payroll.
The firm stated that the the India SMB is more attracted to on-demand collaboration applications with SMB spending on hosted VoIP expected to grow at over 5% in 2009. In addition, India is seen as one of the potential markets for cloud computing where several applications can be hosted.
Sumeeta Misra, Bangalore-based research associate at AMI, said: “The current economic situation has forced many India companies to spend less on technology and their IT infrastructure. Today more SMBs are investing in a hosting model rather than on a customised or package-based software.
“During the current scenario, it makes more sense for companies to host IT applications with a third-party than managing all of them in-house. The total cost of ownership is decreased further reducing hardware and support costs.”
