“While we expect more than 2% spending contraction in Australia and New Zealand SMB markets, they only make up about 10% of the total IT and telecom spending among Asia-Pacific SMBs. Spending growth from bigger SMB markets in China, Korea and India – even if it is slower than last year – will easily compensate for the reduction among Australia and New Zealand SMBs,” says Dr. Vu-Thanh Nguyen, a Singapore-based Research Analyst at AMI-Partners. “These big spenders, together with other growing markets like Indonesia and Malaysia will help to maintain a spending growth of 4.5% for the whole of Asia-Pacific.”
Telecom services and computing, like printers and printing supplies, PCs, and servers, are the two broad categories that will receive significant investment by Asia-Pacific SMBs, about 60% of their total IT and telecom spending. “Nowadays, telecom services and computing are as integral to businesses as water and power to households. Despite the economic downturn, SMBs will still have to spend on basic needs like printing. They also need to continue upgrading and replacing old PCs, and buying new systems such as tablet PCs to maintain and increase employee productivity. Ultimately, such investments are seen to help SMBs reduce costs and enhance their competitiveness.”
“Similarly, spending on telecom services will not only increase business opportunities, collaboration and time efficiency, but also help businesses to reduce expenses. In this crisis, there will be a heightened need to communicate and maintain good relationships with existing customers, partners, and employees, as well as to attract new customers. Therefore, we expect to see similar, if not higher, spending on telecom services and computing compared with last year,” Dr. Nguyen maintains.
While Australia and New Zealand industries will reduce their IT and telecom spending in 2009, SMBs in other Asia Pacific countries will expand their investment, though at different rates. For example, spending growth rates are lower in China real estate and retail industries, but higher among Chinese pharmaceuticals and life sciences. In India, SMBs across all industries are expected to lower their spending growth rates by 1 to 2%. A similar trend is expected for Vietnam SMBs across industries, though with a much smaller magnitude of less than 0.5%.
“Appreciating key country, vertical and employee size opportunities will certainly help IT and telecom vendors to find their silver lining in the midst of this recession,” Dr. Nguyen holds. While most Asia-Pacific countries are expected to experience lower growth in 2009, well-informed vendors could still benefit by offering cost-effective solutions to customers in high potential market segments.
