Monday, September 29, 2008

BIG OPPORTUNITY IN SMALL COS

September 29, 2008
The Economic Times

Global majors Microsoft, Cisco, IBM and Xerox generate over 50% to their India revenues from small and medium businesses by offering relevant products.

Like in all other eco-systems, the small and the big coexist in business, making each other relevant for each other. Take for instance, the information technology business. While all of us would think that the biggies of the business depend primarily on multinational giants to jack up their toplines, many of them are increasingly turning towards small and medium enterprises for more business.

Sample this: Microsoft just launched a new product called Business Essentials which will come at one-fifth the price of a regular ERP package to address a large segment of emerging businesses, which at the moment finds switching to ERP solutions a tad expensive. The package will be a lighter version of a regular ERP package delivering only the essential applications for emerging businesses. "With Business Essentials we are targeting small business up to the range of Rs 50 crore. Small businesses of today will be the large ones of the future," says Rajeev Mittal, group director, Microsoft India. Consumers in this category had to buy a quality ERP package for Rs 10-15 lakh but this one now starts from Rs 2.5-3 lakh along with licensed implementation at the client end by Microsoft partners. The SME market already contributes over 50% to Microsoft's India business. The Indian SMB sector contributes over 60% to Indian GDP, and yet its IT spend is only 30% of the total IT spend of $22 billion by Indian companies, says Zinnov Consulting report.

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