IDC: Asia SMEs outgrew others in IT spending

By Sheila Lam

Computerworld Hong Kong Online

Despite the sluggish global economic environment in 2002, IT spending among Asian small and medium enterprises (SMEs) grew 4.1 per cent. It was the highest growth rate compared to other groups such as large corporations, government, education, and consumer markets.

In absolute dollar term, the Asia-Pacific SME market (excluding Japan) raked in more than US$28.4 billion in IT spending, representing 45 per cent of the total IT spending market.

“We predict that SMEs will continue its IT spending momentum this year to achieve a growth rate of above nine per cent,” said Wilvin Chee, Associate Director, Software Research.

Last year, the SMEs spent 50 per cent of their IT budget on hardware. The remaining was spent on IT services (28 per cent), packaged software (12 per cent) and network equipment (10 per cent).

This year, IDC expects IT services to grow the most at 12.6 per cent while network equipment is next at 10 per cent. Packaged software is expected to reach just below 10 per cent and hardware’s growth rate will be around 7.3 per cent. Overall, IDC is forecasting the IT market for SMEs to grow at 9.5 per cent this year.

IDC’s annual continuum survey, which covers 16 industries across 12 countries in Asia-Pacific, revealed SMEs are seeing Web services remain a low priority. Among all the organizations indicated an interest in this area, only 37 per cent came from the SME sector.

Although business intelligence (BI) was a highly anticipated growth area, it clocked a lukewarm 39 per cent from SMEs. IDC noted that 65 per cent of interested respondents on security solutions were SMEs. And 76 per cent of companies planning to deploy infrastructure management software were from the SME sector.

In terms of wireless solutions, among all the interested parties 79 per cent belonged to SMEs, dispelling beliefs that only large companies are interested in such solutions. IDC stated that SMEs expressed the most interest to deploy knowledge management software, which stood at a whopping 82 per cent of all interested parties.

“Over the next two years, we are anticipating the growth rates to be more steep,” noted Chee. “By 2005, growth should stabilize at around 13 to 14 per cent year-on-year.”