India and China will be the fastest-growing IT services markets this year, with spending of small and medium-sized businesses in both countries rising by 15 per cent over 2006, a study said on Friday.
Small and medium-sized businesses in the Asia-Pacific region were expected to invest at least $18 billion this year in IT related services, up 11 per cent from last year, said the report by US-based Access Markets International.
There are nearly 20 million such businesses across 13 key markets in the region, excluding Japan, said the report.
The research and consulting firm, which specializes in small and medium-sized businesses, defines them as commercial entities with up to 999 employees.
Mature markets, such as Australia and South Korea, would continue to drive nearly a third of the total IT services spending among such businesses in the region this year, it added.
Businesses in Singapore were forecast to invest more than $507 million, up 8 per cent from 2006, while those in Malaysia were likely to spend more than $600 million, up 12 percent from 2006.
The biggest issue for small and medium-sized businesses across Asia, particularly commercial companies with staff numbering up to 99, is how to manage their IT systems in relation to their business growth but with skeletal or no in-house IT staff, Nishant Dave, Access Markets International's Asia-Pacific research director, told The Business Times.
These businesses across the region "generally do not have the resources to negotiate complex services-level agreements with their IT vendors and partners, unlike larger enterprises", Dave said.
Increasing numbers of these companies will tend toward using vendor-branded services because they are perceived to be more reliable, he said. IT vendors sell these either directly or through partners.
Companies with 100 to 999 employees were set to invest $10 billion on IT-related services in 2007 with more than 25 per cent going toward software development, integration and consulting services, Access Markets International said.