Top 10 Trends for Small, Medium Businesses in 2004

AMI: SMBs amplify role as drivers of IT market turn-around, operationally justified areas of IT focus capture the lion's share of growth

New York April 1, 2004 The top 10 IT trends for the small and medium business (SMB) markets were released today by New York-based Access Markets International (AMI) Partners Inc., a consulting firm specializing in market intelligence, trends and strategy in SMB enterprises.

AMI said it conducts the annual tracking surveys in several countries, including the United States, Canada, France, Germany, the United Kingdom, Australia, China, India, Japan, South Korea, Singapore, Brazil and Mexico.

The trends, according to the survey, are as follows:

1) Asia Pacific SMBs are poised to outstrip counterparts in other regions for IT spending in 2004

AMI forecasts that IT spending by Asia Pacific SMBs (excluding Japan) will grow by 19 percent in 2004, compared with an estimated 10 percent expected growth for SMBs in the rest of the world.

Moreover, the Asia Pacific region accounts for over 60 percent of the 1.5 million additional SMBs expected in 2004, representing tremendous growth opportunities. Globalization and offshore outsourcing trends have driven the need for connectivity among businesses across the world, particularly the emerging markets. With strong government support and initiatives in many Asia Pacific countries, the previously under-saturated SMB markets are expected to make robust strides adopting new and advanced IT products/solutions, thus fueling IT spending. AMI anticipates strong focus on technologies such as virtual private networks (VPNs), networking storage, wireless local area network and broadband access.

2) PC replacement cycles will shrink temporarily to accommodate a shift to laptops

IT vendors have been waiting for the next surge in PC sales. As the last wave of PC purchases were made approximately four years ago, primarily due to fears caused by Y2K, PC purchases have not increased dramatically, resulting in a more than 4-year replacement cycle. With wireless LANs displaying tremendous growth and wireless hubs and access points continuing to emerge, IT hardware manufacturers will sell more portable PCs.

As a result of this prolonged upgrade cycle, coupled with the recent technological advancements, AMI believes that the next PC upgrade wave will hit in 2004. According to AMI surveys, in 2004, worldwide notebook PC sales, among SMBs, will account for almost one-quarter of all SMB PC shipments. This percentage is expected to continue rising in the future, as portable PC shipments are poised to increase approximately 18 percent over the next 12 months.

3) SMBs pushed to change business operations to accommodate large business clients

Large businesses (LBs) account for approximately 25 percent of all B2B transactions conducted by SMBs. Due to the quantity of business conducted, many SMBs have become dependent on the LB space, resulting in some challenges. With this kind of control and power, LBs have been strongly influencing SMBs to adopt advanced technologies at a much faster rate.

Over the past several years, as the economy slowed and markets grew exceptionally competitive, many SMBs became more focused on their top clients. AMI anticipates that this trend will continue through 2004, with more and more SMBs adopting extremely advanced solutions. Specifically, inventory management and supply chain management will surge dramatically with increased sales in enterprise resource planning (ERP)/supply chain management (SCM) software.

AMI also predicts that ERP/SCM will rise approximately 20 percent over the next 12 months in the worldwide SMB space, ultimately creating a more efficient marketplace to satisfy LB needs and requirements.

4) VPNs and firewalls are well-placed due to elevated risks and vulnerabilities in the SMB marketplace