Learn more about the ICT adoption in the Indian SMB market. this report is to present the opportunities available in the SMB sector for IT product or service providers. This study has been conducted by interviewing over 1400 SMBs across 40 Cities in India. 1. Drivers and Inhibitors to Adopt ICT 2. Business pain points of SMBs 3. Potential Investment in ICT

1. Applied Intelligence
2014
Understanding Indian SMB
behavior towards ICT adoption
40 Cities
1400 SMBs
100 IT Decision Makers
This study reflects the Indian SMBs’ (Companies between
10 to 1000 employees) behavior and inclination to adopt
ICT and highlight some of the key factors involved in the
ICT adoption. This study will help product/services
providers better understand, develop, market and sell IT
products/services to the small and medium market and
improve their ability to link the value of their product/services to the specific SMB audience
More Info: arun.hegde@researchfox.com
himanshu@researchfox.com
Contact: 08040493888,+91-9845213700
Visit : www.researchfox.com

2. 09
Market View
Executive Summary
Introduction
Research Overview
Purpose and
Scope
Market Ecosystem
Changing IT
Landscape &
Market scenario
Key Take-Away
10
Abstract
Research
Methodology
Our Approach
11
Overall Indian
SMB IT Market Size
Methodology
Overall Framework
13
Survey Participant 14
Profile
Forecasts
Assumption
SMB Market
16
Markets Covered
Segment Definition
Industry Trends
36
Market Dynamics
51
Drivers - Internal &
External
By Age of Company
By Verticals
By Ownership
Generation
By Revenue Size
By Employee Size
By Growth of the
Company
Drivers for cloud
Adoption
57
64
Market Share
Analysis
65
67
68
69
Perceived Benefits
of ICT Adoption
58
59
60
61
62
63
Major Pain Points &
ICT Adoption
Opportunities
By Age of Company
By Verticals
By Ownership
Generation
By Revenue Size
By Employee Size
By Growth of the
Company
74
Key Influencers
81
73
74
76
77
78
79
80
87
28
ICT Usage Among
Indian SMBs
50
70
71
72
22
ICT Adoption
Among Indian
SMBs
Value Chain
Analysis
By Revenue Size
By Employee Size
By Growth of the
Company
Barriers - Cloud
Adoption
19
ICT Awareness
Among Indian
SMBs
44
48
Inhibitors
By Age of Company
By Verticals
By Ownership
Generation
Report Description
46
Contents
01

3. Preference of
Accessing the
Software
92
Purchase Trend
98
Preferred Mode of
Payment
104
Factors Affecting
the Buying
Decision
By Age of Company
By Verticals
By Ownership
Generation
By Revenue Size
By Employee Size
By Growth Rate
106
106
107
108
Potential Area of ICT Deployment in SMBs
90
SMB ICT : Market Size & Forecast by Sales
Buying Behaviour
Buying Decision
Cycle
109
110
111
113
By Verticals
114
Manufacturing
Overview
Case Study
Services
Overview
Case Study
Retail
Overview
Case Study
119
Education
Overview
Case Study
By Cloud
121
By Age of Company
By Verticals
By Ownership
Generation
By Revenue Size
By Employee Size
By Growth Rate
126
127
128
129
130
131
117
Contents
02

4. List of Exhibit
List of Tables
Table1: ResearchFox’s SMB
Segmentation
Table 2: India Govt.’s SMB Segmentation
Table 3: EU’s SMB Segmentation
Table 4: ResearchFox’s SMB
Segmentation
Table 5: IT Spend & Forecast
28
Exhibit 1: Framework for ICT adoption
Exhibit 2: Survey Participant Profile
Exhibit 3: Maturity Level of IT adoption
Exhibit 4: ICT Awareness Among
Indian SMBs
Exhibit 4.1: ICT Awareness Among
Indian SMBs by age of the company
Exhibit 4.2 : ICT Awareness Among
Indian SMBs by verticals
Exhibit 4.3: ICT Awareness Among
Indian SMBs by generation ownership
Exhibit 4.4: ICT Awareness Among
Indian SMBs by revenue size
Exhibit 4.5: ICT Awareness Among
Indian SMBs by employee size
Exhibit 4.6: ICT Awareness Among
Indian SMBs by growth rate
Exhibit 5: ICT Deployment
Exhibit 5.1: ICT Deployment Among
Indian SMBs by age of the company
Exhibit 5.2: ICT Deployment Among
Indian SMBs by verticals
Exhibit 6.2: ICT Usage Among
Indian SMBs by verticals
Exhibit 6.3: ICT Usage Among
Indian SMBs by generation ownership
Exhibit 6.4: ICT Usage Among
Indian SMBs by revenue size
Exhibit 6.5: ICT Usage Among
Indian SMBs by employee size
Exhibit 6.6: ICT Usage Among
Indian SMBs by growth rate
Exhibit 7.1: Market Ecosystem –
Segment Definitions
Exhibit 7.2: Changing IT landscape
and Market scenario
Exhibit 7.3: Value Chain Analysis
Exhibit 8: Top 3 ICT adoption
drivers
Exhibit 8.1: Mechanism of ICT
Drivers (Internal Factor)
Exhibit 8.2: Mechanism of ICT
Drivers (External Factor – Client
Requirement)
Exhibit 8.3: Mechanism of ICT
Drivers (External Factor – Compliance Requirement)
Exhibit 5.3: ICT Deployment Among Exhibit 8.4: Mechanism of ICT
Indian SMBs by generation ownerDrivers (External Factor – Competiship
tor Pressure)
Exhibit 5.4: ICT Deployment Among Exhibit 8.5: ICT Drivers by age of
Indian SMBs by revenue size
the company
Exhibit 5.5: ICT Deployment Among Exhibit 8.6: ICT Drivers by verticals
Indian SMBs by employee size
Exhibit 8.7: ICT Drivers by generaExhibit 5.6: ICT Deployment Among tion ownership
Indian SMBs by growth rate
Exhibit 8.8: ICT Drivers by revenue
Exhibit 6: ICT Usage Among Indian
size
SMBs
Exhibit 8.9: ICT Drivers by employExhibit 6.1: ICT Usage Among Indian ee size
SMBs by age of the company
Exhibit 8.10: ICT Drivers by growth
rate
Exhibit 8.11: Drivers – By Growth of
the company
Exhibit 8.12: Drivers For Cloud
Adoption
Exhibit 9: Inhibitors/Barriers
03

5. Exhibit 9.1: Inhibitors/Barriers –
By Age of the Company
Exhibit 9.2: Inhibitors/Barriers –
By Verticals
Exhibit 9.3: Inhibitors/Barriers –
By Ownership Generation
Exhibit 9.4: Inhibitors/Barriers –
By Revenue Size
Exhibit 9.5: Inhibitors/Barriers –
By Employee Size
Exhibit 9.6: Inhibitors/Barriers –
By Growth Rate
Exhibit 9.7: Inhibitors/Barriers –
for cloud adoption
Exhibit 10.1: Pain Points – By Age
of Company
Exhibit 10.2: Pain Points – By
Verticals
Exhibit 10.3: Pain Points – By
Ownership Generation
Exhibit 10.4: Pain Points – By
Revenue Size
Exhibit 10.5: Pain Points –
By Employee Size
Exhibit 10.6: Pain Points –
By Growth Rate
Exhibit 11.1: Key Influencers –
By age of the company
Exhibit 11.2: Key Influencers –
By Verticlas
Exhibit 11.3: Key Influencers –
By Ownership Generation
Exhibit 11.4: Key Influencers –
By Revenue Size
Exhibit 11.5: Key Influencers –
By Employee Size
Exhibit 11.6: Key Influencers –
By Growth Rate
Exhibit 11.7: Perceived Benefits of
IT
Exhibit 12.1: Decision Cycle of
Small Business
Exhibit 12.2: Decision Cycle of
Medium Business
04
Exhibit 12.3: Preference of accessing the software – By Age of the
Company
Exhibit 12.4: Preference of accessing the software – By Verticals
Exhibit 12.5: Preference of accessing the software – By Ownership
Generation
Exhibit 12.6: Preference of accessing the software – By Revenue Size
Exhibit 12.7: Preference of accessing the software – By Employee
Size
Exhibit 12.8: Preference of accessing the software – By Growth Rate
Exhibit 13.0: Purchase Trend –
By Age of the company
Exhibit 13.1: Purchase Trend –
By Verticals
Exhibit 13.2: Purchase Trend –
By Ownership Generation
Exhibit 13.3: Purchase Trend –
By Revenue Size
Exhibit 13.4: Purchase Trend –
By Employee Size
Exhibit 13.5: Purchase Trend –
By Revenue Size
Exhibit 13.6: Purchase Trend –
By Revenue Size
Exhibit 13.7: Important Factors
while purchasing – By Age of the
company
Exhibit 13.8: Important Factors
while purchasing – By Vertical
Exhibit 13.9: Important Factors
while purchasing – By Ownership
Generation
Exhibit 13.10: Important Factors
while purchasing – By Revenue
Size
Exhibit 13.11: Important Factors
while purchasing – By Employee
Size
Exhibit 13.12: Important Factors
while purchasing – By Growth Rate
Exhibit 14.0: Potential Area of ICT
Deployment In SMBs
Exhibit 14.1: Potential Area of ICT
Deployment In SMBs - By age of
the company
Exhibit 14.2: Potential Area of ICT
Deployment In SMBs - By Verticals
Exhibit 14.3: Potential Area of ICT
Deployment In SMBs - By Ownership Generation
Exhibit 14.4: Potential Area of ICT
Deployment In SMBs - By Revenue
Size
Exhibit 14.5: Potential Area of ICT
Deployment In SMBs - By Employee Size
Exhibit 14.6: Potential Area of ICT
Deployment In SMBs - By Growth
Rate
Exhibit 15: Next Step

6. Research Overview
05

7. Purpose
This study reflects the Indian SMBs’ (Companies
between 10 to 1000 employees) behavior and
inclination to adopt ICT and highlight some of the key
factors involved in the ICT adoption. This study will
help product/service providers better understand,
develop, market and sell IT products/services to the
small and medium market and improve their ability
to link the value of their product/services to the
specific SMB audience
Scope
As mentioned, this report is to present the opportunities available in the SMB sector for IT product or
service providers. This study has been conducted
among 1400 SMBs across 40 Cities in India. Following
parameters were covered during this study:
Awareness, Adoption and Usage of ICT solutions
among SMBs (For various functions like Communication, Streamlining finance and its tandem Products, HR and Payroll Management, Quality Management, Production and Designing, Centralized System
and Inventory Management)
Drivers and Inhibitors to Adopt ICT
People influencing IT related decision making
Business pain points of SMBs
Potential Investment in ICT
06

8. Key Take - Aways
This study will help to:
Identify the compartments of demand for different products/services of
SMB type
Understand the behaviour of SMBs towards ICT adoption through
various parameters like geography, vertical, age of company, ownership
generation, employee size and revenue
Identify drivers & inhibitors as well as influencers affecting the IT
purchase decision by SMBs
Identify the social media behaviour amongst SMBs
Understand current and future buying plans for specific categories of IT
product/service (Cloud, enterprise mobility and PC based software)
Understand the current buying pattern as well as future buying preferences
07

9. Research Methodology
08

10. Our Approach
Survey
The study was conducted with an Interlink
approach. In this we had Interfaces with industry
associations, in depth interviews, a nationwide
survey and research on prevailing database.
A statistically proven sample size was acknowledged for understanding the adoption levels and
key drivers and Inhibitors. The sample was
segmented across the recognized demographic
cuts
Industry Associations
Methodology
Interaction with the associations enabled the
roadmap for the initial hypothesis, which was
subsequently validated through the survey
results, in-depth interviews and comprehensive
analysis.
ResearchFox SMB – ICT Adoption Behavior 20141
was designed and conducted in November and
December 2013. The research questioned 1400
SMBs that employ 5 to 1000 employees across 40
cities in India, completed in 1st week of January
2014.
In Depth Interviews
Initial discussions were conducted with a statistically proven representative sample of the key
stakeholders across various verticals to establish a
preliminary hypothesis. The initial hypothesis
were validated through in-depth interviews and
reformed accordingly to reproduce initial
findings. The questionnaire was refined through
initial interaction with Industry Experts.
Knowledge base
Facts backed up by data base and experience was
strengthened to do a preliminary analysis of the
SMB Sector in India. The Sector was segregated
based on identifying demographic cuts such as
geography, employee size and so forth based on
the prevailing data.
1
Companies were selected from online business
directories. Companies without internet
access/ and or companies not using email were
screened out. So all projections made in this
report are based on this standard.
Respondents were IT decision makers or
influencers who spend at least 5% of their time
on IT and are aware of most of the company's
application.
Larger SMBs were intentionally oversampled to
ensure sufficient responses within the size
group for analysis.
The sample is weighted by estimating company
size within each state to be representative of
the SMB population by verticals.
99% confidence level and 3.5 as a confidence
interval.
The survey was conducted to validate the initial anticipated hypothesis and also to redefine strategies that can enable the technology suppliers to enhance
their competency and accordingly develop product and services for SMB’s sustainable business growth.
09

11. Sample Charts
“Higher the growth of the company higher is the awareness about
ICT solutions used for various purposes”
By Growth of the Company
A1
99%
Communication
91%
100%
95%
100%
Collaboration
98%
A2
47%
HR/Payroll
Management
86%
55%
Finance &
Accounting
91%
83%
96%
B1
39%
Inventory
Management
50%
46%
73%
82%
B2
24%
27%
Designing and
Production
Customer
Management
66%
Quality
Management
32%
42%
53%
59%
C1
30%
Centralized ERP
24%
38%
Mobile Value
Added Services
30%
60%
High (More than 20%)
Source: ResearchFox Consulting SMB ICT adoption survey
55%
Medium (5 to 20%)
Low (Less than 5%)
Multiple responses allowed
Base: 1400 Units
Exhibit 4.6: ICT Awareness among SMBs by Growth of the company
It has been found that of the ICT solution has a bond with the growth of the company. Low awareness
level can be attributed to Low growth.However, 39 percent of the companies with low growth believes
that they can optimize their business with the help of inventory management solutions.
10

12. “More than 40% of SMBs with Rs. 5 -20 Crores as a turnover are
finding it difficult to retain the staff and also to acquire and
manage customers”
By Revenue Size
Business Pain
Points
Year of
Existence
Compliance
Activities
Incomplete
Business
Information
on my firm
Insufficient
Market
Information
Customer
Acquisition &
Management
Attrition of
Staff
Others
Less than Rs. 1 Crore
Rs. 1 to 5 Crores
Rs. 5 to 20 Crores
Rs. 20 to 50 Crores
More than Rs. 50 Crores
More than 60 % respondent
40 – 59 % respondent
Figures are in %
Source: ResearchFox Consulting SMB ICT adoption survey
20 – 39 % respondent
10 – 19 % respondent
1 – 9 % respondent
Multiple responses allowed
Base: 1400 Units
Exhibit 10.4: Pain Points – By Revenue Size
Many SMBs have identified CRM and analytical software as a solution to their existing problem of acquiring managing and retaining the client. Still there are more than 60 percent micro level firms which are
facing the same difficulty. Since, CRM and analytical solutions are higher priced and it was analyzed in
our study that the companies with higher turnover has lesser pain towards the point of customer
acquisition and management.
There were no major pain except attrition of staff in the mid sized companies earning more than Rs. 50
Crores as a revenue.
ISVs have come up with a lot of cloud based CRM solutions, which in turn would decrease the pain of
micro level companies.
11
ISV - An independent software vendor (ISV) is a company specializing in making or selling software, designed for mass or niche markets. This
typically applies for application-specific or embedded software, from other software producers.
11

13. About ResearchFox
ResearchFox is a Bangalore based market research
Company with focus on delivering high quality
research services to business professionals, organizations and individuals through knowledge driven
research methodology.
We provide first-hand data services & reports on
various industries, technologies, market parameters
and key competitors in the industry thereby giving
rational forecast on market trends to help clients
identify prospective growth areas and gain competitive edge.
Applied Intelligence
Established as SBU of Han Digital group in 2009 and
by 2012 ResearchFox Officially incorporated. We
provide niche market research services which goes
beyond client - vendor transactions/ interactions by
not only paving way for strong relationships but also
creating a healthy ecosystem for actionable decision
making
Services
Solutions
Industry
Market Intelligence
SMB Trend Tracker
Information Technology
Consumer Research
Talent Consulting
Telecom
Pay as you Go
Kick Start
Consumer & Retail
Talent Services
Automotive
Syndicated Research
Education & Training
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