Be happy while you're living, for you're a long time dead (Scottish proverb)
For the first time, AMI-Partners releases its Business ICT Adoption (BIA) index to measure the ICT adoption level of small and medium businesses (SMBs, companies with less than 1000 employees) around the world. While the top range of BIA index is dominated by European countries, 12 markets with highest SMB ICT spending are spread across the world. Among these top 12 large markets, Brazil, China, and India have the lowest BIA indexes; while Germany, United States, Japan, and United Kingdom not only have highest BIA index values but also considerable SMB ICT spending.
Based on its long-standing research on SMB markets across the world, AMI-Partners developed its 3-wave model to help vendors understand and segment their SMB customers based on their ICT adoption. In particular, SMBs in Wave-1 are classified as those mostly concerned about building basic IT infrastructure with PCs and basic software; while SMBs in Wave-2 have more advanced needs, for example, connecting their businesses with LAN, server and protecting them with network firewall and intrusion detection. At Wave-3, SMBs are more systematic and proactive in their ICT investment, actively extend their enterprises with Intranet, WAN, SAN, IP PBX, and sophisticated software solutions like CRM, ERP.
“Building upon our 3-wave model and using data from our worldwide biannual research, we developed the Business ICT Adoption (BIA) index to measure the level of ICT adoption of SMBs in different markets. Qualitatively, it is a common understanding that SMBs in developed countries like US and Germany have higher and more sophisticated level of ICT adoption than SMBs in emerging markets like China and India. However, we have no quantitative index to measure and compare their ICT adoption levels until now,” says Dr. Vu-Thanh Nguyen, who drives the BIA index research in AMI-Partners.
“When looking at the number of businesses using PCs, the BIA index, and ICT spending of different countries, we can also roughly see how different markets are developing and their potentials. For example, China and India markets have similar number of SMBs with PCs, similar BIA index, but China’s SMB ICT spending is more than double that of India. It means that if SMBs in both countries maintain the same ICT adoption paces in the next few years, the relativity of SMB ICT spending between two countries will probably not change significantly. Meanwhile, Germany has a higher number of PC SMBs and nearly 3 times higher BIA index (62 vs. 24) than China, but its SMB ICT spending is only 35% higher than China’s number (US$ 66 billion vs. US$ 49 billion). That means Germany SMB market has become matured and stable in size, while there is still a lot of room to growth in China SMB market,” Vu-Thanh added.
In Asia Pacific region, SMBs in Australia, New Zealand, Japan, Singapore, and Hong Kong are leading in ICT adoption with highest BIA index values (63, 58, 55, 48, and 40, respectively). These markets not only have high penetration of PCs among SMBs but also have a sophisticated ICT usage among their SMBs. While China, Korea, and India do not belong to the top 5 markets in terms of BIA index, they are among the biggest markets in terms of ICT spending in 2011, only after Japan. Meanwhile, Vietnam is still the smallest SMB market in terms of ICT spending (US$ 3 billion) and also the least development market in terms of BIA index (10 out of 100).
“The BIA index offers another dimension for vendor to analyze business ICT market. Instead of focusing only on ICT spending numbers, vendors could use BIA index to understand the ICT adoption in each country in order to provide suitable services and products to each particular market,” added Venu Reddy, Vice President of AMI-Partners, Asia Pacific. “Tracking BIA index over a preriod of time in a specific country also allows vendors to observe the development of business IT in that market and adapt their business plan accordingly.”
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