Small and medium-sized businesses (SMBs) in Asean, including Singapore, Malaysia, Indonesia, Thailand, Philippines and Vietnam, will invest approximately US$12.5 billion to beef up their IT infrastructure in 2007, a 17 percent increase over last year, according to AMI-Partners.
In a new survey released this week, the research house said Vietnam will lead the growth in this market segment with IT investments projected to increase 24 percent over last year.
According to Balaji Sreedhar, a Singapore-based research analyst at AMI-Partners, the top three countries dominating Asean SMBs' IT spending are Indonesia, Malaysia, and Singapore, respectively. "These countries together contribute to over 66 percent of the SMB IT spend in Asean," he said.
Across this region, the top three priorities of SMB spending are computing, Internet, and IT services.
"Indonesia's IT spending is set to grow 19 percent this year over last year, [while] Malaysia will see IT spend rise 14 percent and Singapore will go up [by] 8 percent," Sreedhar said. He added that the bulk of the IT spending for SMBs in Indonesia will be on computing, Internet, security and storage, while SMBs in Malaysia and Singapore will focus the bulk of their spending on computing, Internet and IT services.
Meanwhile, Thailand's SMBs are expected to grow its IT investments by nearly 17 percent, while the Philippines will increase its IT spending by18 percent this year, according to the AMI-Partners study.
"SMBs in Singapore are more mature than their counterparts in Vietnam, Indonesia and Thailand, which is also reflected in Singapore's muted spending growth," Sreedhar said. The analyst also noted that while the Singapore's SMBs are investing in "incremental amounts" to strengthen their IT infrastructure, the majority of SMBs in emerging economies Thailand and Indonesia, are "just starting to invest on IT infrastructure", and as such, fueling the high growth rate in IT spending in the two countries.
The study also noted that small-sized businesses--with fewer than 99 employees--will account for up to two-thirds of Asean's total IT spend, where the bulk of their investments will focus on computing, consisting essentially of PCs, servers and printers.
Sreedhar said: "Spending on security, storage and networking solutions is not big, since small-sized businesses in Asean are just setting up their IT infrastructure, and their first priority is to beef up on basic computing needs."
Across industries, the manufacturing sector--including both discrete and process--is dominating IT investments in the Asean region, of which the bulk of the spending comes from the pool of manufacturing SMBs in Indonesia, Philippines and Vietnam. The AMI-Partners study also indicated that other sectors contributing to the IT spend include professional services, such as financial planning, billing and recordkeeping, and retail.
"SMBs in the manufacturing sector in these countries are barely equipped with PCs and printers, and quite a few don't even have this basic IT infrastructure," Sreedhar said. "However, with the economy on the upswing in these countries, SMBs in the manufacturing vertical are flourishing. This, in turn, is leading them to invest more in IT infrastructure."
"The Asean market is poised for some exciting times ahead, and IT vendors should take notice of this market and start marketing solutions tailored for specific economies across Asean," he added.
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