by September 1, 2011 0 comments

Anil Chopra, Adeesh Sharma, Rahul Sah, and Gurjot S. Sachdeva

Till last year, the Users’ Choice awards purely targeted large and very large enterprises, which comprised of organizations with more than 500 and 1000 employees respectively. But given that small and mid-sized enterprises in India are seeing a significant growth, we decided to shift gears and also target our survey toward this segment this year.

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So this time, we have reached out to two types of organizations-those with 100-499 employees (SME) and those with 500-1000 employees (large). Since the IT needs of companies in these segments varies, their choice of IT brands is also likely to differ. To see this difference, we’ve analyzed both segments and reported their results separately. The results are interesting, showing a clear pattern of differences in brand preferences between the two segments. Presented here are the key highlights about the SME segment after doing this survey.

Low IT brands awareness

This would be a rare occurrence in large and very large enterprises, but in the SME space, there are several product categories that don’t have a dominant IT brand. In fact, there are many categories that are dominated by lots of small/local players and very few known names. The only time we found this happening amongst larger enterprises was many years ago when office PCs were ruled by local assemblers because the branded PCs were far too expensive. Even that changed gradually as the pricing gap between the two narrowed to a point where there was hardly any difference in pricing.

Low penetration in managed IT services by the biggies

Like the local PC assemblers, even this space has lots of small, local players offering complete managed IT services. We noticed that in most managed IT services categories, there were one or two dominant brands that managed to make it to the Users’ Choice club. The rest were all local players. In some cases, we had to drop a category in the SME space (like DR and BCP provider) because we didn’t get sufficient votes in the same. Overall also, the number of votes in most categories under managed IT services were pretty low, except for the very common ones like Internet service provider, managed systems services, etc.

IT/ITeS SMEs have the highest average IT spending

Based on the annual IT spends data, we found that IT/ITES companies had the highest average annual IT spending as compared to other verticals we reached out to. It came on an average to 45L per annum. The next closest vertical was the education sector at around 26L/year, followed by process manufacturing at around 23L/year. The lowest IT spending is from the discrete manufacturing segment. In large enterprise space, the BFSI segment has the highest IT spends, followed by the process manufacturing companies.

Initial price and after sales service/support are concerns

Apart from finding out which IT brands are the respondents likely to buy in the future, we also delved into their reasons for doing so. Not only that, but we also delved into the reasons why companies already owned specific IT products. The four reasons that respondents had to choose from were brand value, product reliability, initial price, and afte sales service/support. Of these, brand value and product reliability emerged as the key reasons for choosing most of the IT products. The other two reasons received relatively much lower responses.

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Click on the image to enlarge

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We can’t really say that price and support don’t matter to the buyers. In fact, when you look at the SME space, these two are perhaps equally if not more important than brand value and product reliability. What this means is that none of the IT product vendors have been able to establish their products as extremely cost effective or superb after sales service/support. A foray into establishing a mindset for these two reasons could therefore be very beneficial, both for the SMEs and the vendors.

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