Indian SMBs lead in technology spending; 35% SMBs plan to be in the cloud in the next 2-3 years: Microsoft Study

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  • The study examines the relationship between SMBs’ technology adoption, technology partners, and business results in 10 markets, including India
  • Almost 35% of SMBs in India are spending over 10% of their revenue on technology
  • 26% of SMBs in India are early adopters of new technologies
  • Competition intensity remains a major obstacle for India SMBs

New Delhi, October 06, 2022: The recently unveiled Microsoft SMB Voice and Attitudes to Technology Study 2022 revealed that Small and Medium Businesses (SMBs) in India lead in spending on technology with around 35% of them spending over 10% of their revenue on technology, in comparison to global counterparts. Growth of customer base and improvement in customer retention are some of the top drivers of technology adoption by SMBs in India.

This study examines technology’s role in shaping the landscape, and their attitudes, preferences, and adoption of technology. Prepared by Analysys Mason, the study covers over 3,000 businesses with 1-300 employees in the top five industry verticals across 10 high and middle-income markets worldwide, including India.

Indian SMBs lead in tech spending, cloud adoption

  • SMBs in India are the most optimistic about future cloud adoption; 27% of SMBs in India are all or mostly cloud based – a percentage that is expected to be global average in 2-3 years.
  • 26% of SMBs in India are early adopters of new technologies. They lead their counterparts in other countries when it comes to spending on technology with around 35% of them spending over 10% of their revenue on technology. Of these, 22% SMBs in India are most likely to plan on an increase of over 10% over the next year.
  • SMBs in India look to technology to help them to grow their customer base (39%) and improve customer retention (38%).
  • SMBs in middle-income markets (27%) are more concerned about cloud migration than their counterparts in high income markets (22%).

Competition intensity is a greater challenge in India than elsewhere

  • No single business challenge is common to more than one third of SMBs – competition intensity and supply chain issues are most common.
  • SMBs in India are the most likely to view competition intensity as a major obstacle (35%).
  • SMBs in middle-income markets (27%) are more concerned about cloud migration than their counterparts in high income markets (22%).
  • Customer loyalty, cash flow, cloud migration and regulations are equally challenging to approximately a quarter of SMBs.

Managed Service Provider (MSPs) and Cloud Service Providers (CSPs) are the most preferred technology partners for a third of SMBs

  • Due to the impact of the pandemic, SMBs are more willing to invest in managed IT services and cloud solutions.
  • SMBs are actively looking for partners with advisory and guidance capabilities, such as Managed Service Providers (MSPs) or Cloud Service Providers (CSPs) and System Integrators (SIs).
  • 31% of SMBs prefer to buy technology products and services through MSPs and CSPs. Many SMBs do not have the capacity or the requirement to onboard IT specialists. As a result, MSPs and CSPs are ideally placed to support SMBs’ technology challenges by supplementing SMBs’ internal IT teams with specialist skills.
  • 25% of SMBs surveyed in India prefer working with application developers/Independent Software Vendor (ISVs).

SMBs value a wide range of CSR/ESG goals, but environmental sustainability is the most common objective

  • SMBs in India (45%) are most likely to want to improve environmental sustainability vis-à-vis 37% SMBs across the markets.
  • Half of SMBs recognized social goals as primary business objectives, including sustainable business practices and diversity and inclusion.
  • A third want to increase employee satisfaction, to ensure higher retention of employees, and improves the lives of people in the community, while another third want to improve their ability to protect their customers’ data with high-quality cyber-security solutions to ensure they are acting as responsible businesses.

Samik Roy, Executive Director, Corporate Medium, and Small Business, Microsoft India, said, “It is evident that linking technology investments and adoption with business strategies, as well as close collaboration with partners are crucial to deliver success for SMBs. Organizations, big or small, that are rooted in technology and committed to harnessing its full potential, will be able to stay ahead of the curve by becoming more agile, resilient, future-ready businesses.”

SMBs are the cornerstone of the economy and vital job creators, contributing approximately 30% to India’s GDP and providing employment to over 114 million people in the country. Microsoft is committed to empowering SMBs through its continued investments and commitments, giving these organizations trusted technologies they need to innovate and grow.

Read the full report here: Microsoft small and medium business (SMB) voice and attitudes to technology study

To learn more about Microsoft solutions for SMBs in India, visit Microsoft – Make your business future-ready

About Microsoft India

Microsoft (Nasdaq “MSFT” @microsoft) enables digital transformation for the era of an intelligent cloud and an intelligent edge. Its mission is to empower every person and every organization on the planet to achieve more. Microsoft set up its India operations in 1990. Today, Microsoft entities in India have over 20,000 employees, engaged in sales and marketing, research, development and customer services and support, across 11 Indian cities – Ahmedabad, Bengaluru, Chennai, New Delhi, Gurugram, Hyderabad, Kochi, Kolkata, Mumbai, Noida, and Pune. Microsoft offers its global cloud services from local data centers to accelerate digital transformation across Indian startups, businesses, and government organizations.

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