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SMEs to increase IT spending by 0.7%, says MIC

Strong demand for new software seen fueling growth momentum in IT sector

SMEs to increase IT spending by 0.7%, says MIC

Demand for desktop computers, servers and Voice-over-Internet Protocol equipment is expected to shore up Taiwanese small- and medium-sized enterprises' IT spending by 0.7 percent this year, a Taipei-based intelligence company said in its latest report.
Growth momentum would also come from SMEs' demand for disk arrays, Network Attached Storage (NAS), and Virtual Private Network equipment, the Market Intelligence Center said.
Last year, local SMEs' IT investment on average reached NT$3.06 million (US$92,447.10), representing a growth rate of three percent, results of a poll conducted by MIC showed.
In 2007, IT spending is expected to grow due to demand for integrating and upgrading existing software and strengthening information security, and due to IT hardware procurement and system maintenance, the market research firm said.
About half of SMEs have relatively a large demand for new desktop PCs and servers while demand for storage equipment mainly focuses on NAS and disk arrays. Survey results also showed that in network communications, SMEs are focusing on VPN and VoIP, while their primary choices for IT software are Customer Relationship Management (CRM), Enterprise Resource Planning (ERP), and Business Intelligence (BI), MIC said.
"IT outsourcing demand mainly revolves around application system design and development, maintenance of application systems, and design and set-up of Web sites," said the information and communication technology research house.
"Taiwanese SMEs are rather conservative in their attitude toward Windows Vista, as hardware requirements for Windows Vista are high and as companies take their original schedule for IT hardware replacement into consideration." The average IT investment of SMEs in the manufacturing industry was NT$2.5 million (US$75,528.70), MIC added.
This year, those companies are expected to focus on IT integration and strategic analysis in their software investments. The electronics industry is expected to aggressively invest in CRM and BI, MIC said.
In the service sector, SMEs are expected to focus more on their CRM, ERP, and BI initiatives in the next three years. Wholesale retailers and companies that employ 20 to 49 people will have relatively strong demand for enterprise Web sites, it added.
"Looking at IT services, due to the fact that domestic Taiwanese companies have been cultivating clients for a considerable period of time, they have won the trust of many Taiwanese SMEs. Both domestic and overseas IT service companies are highly regarded by SMEs in the manufacturing industry," MIC said.
Last year, each employee in a Taiwanese SME used 0.83 PC on average. Each member of an SME's IT support staff had to service 25 employees, and manage nearly 17 PCs, it added.
IT investment for each employee in SMEs amounted to NT$40,000 (US$1,208.5), while investment per PC reached more than NT$60,000 (US$1,812.7). Last year, IT investment as a percentage of surveyed SMEs' revenue was 1.3 percent.
MIC also found that SMEs based in northern Taiwan were relatively ahead in terms of the value of IT investments and the level of IT used in the workplace, showing that there are still "significant gaps" between the northern, central, and southern regions of the country.