SMEs in India: Opportunities in credit crunch

MELBOURNE, AUSTRALIA: According to Ovum, SMEs in India are highly price sensitive, less exposed to the global market, and confident about spending in the current economic climate. They are keen to move to managed services, although reluctant to increase the proportion of expenditure on mobile services.

India has a broad diversity of suppliers and is a highly competitive market place. There is no single dominant player across the country for telecommunication services and the competition is greater than in most of the Asian markets. The number of options for mobile service is greater than on the fixed services.

“As a result, in order to get the best of breed, the majority of SMEs prefers not to have single provider for multiple services”, says Claudio Castelli, Senior Analyst at Ovum and author of this report. “The common strategy of bundling services, deployed by service providers in many other places, is less likely to be effective in this market,”

SMEs in India are looking at ways of reducing unnecessary up-front capital investment. Castelli adds, “Seventy one percent of the companies surveyed prefer to have a predictable monthly recurring charge per user for telecoms equipment and services.”

The high interest in opex-based models for telecoms equipment and services in this market is reflected in the SMEs mature views on managed services. A few SMEs are already using managed services and many others are planning to do so in the future.

“They are most keen to adopt managed audio/video conferencing, PBX/IP PBX, security and specialist business software applications”, says Claudio, based in Melbourne.

In addition, the share of mobile workers is growing; 43 percent of SMEs' employees have some degree of mobility. “However this isn’t reflected in the budget allocated for mobile services”, says Claudio. “Unsurprisingly, controlling the cost of mobility is a high priority amongst the SMEs.”

Like in many other Asian countries, the majority of the companies does not provide wireless devices to employees needing mobility for business purposes. This is a clear indication that users are generally providing and supporting their own personal mobile devices when at work.

Ovum believes this practice is dangerous and might result in business risks. For example, if a salesperson goes to a competitor, their customers will continue to contact him at that number.

Overall, players taking the managed services path will have higher chances to succeed with SMEs in this market. At Ovum, we expect the software as a service (SaaS) approach to be a good opportunity for services providers and solution vendors.