Developing nations set for huge IT growth

Small business in Thailand and Indonesia will fuel strong growth in the next three years

IT spending at small and medium sized business in Thailand and Indonesia will grow more than 20 per cent annually over the next three years, according to a recent report from New York-based market analysis group AMI-Partners. 

Small businesses in Indonesia invested $1.6bn in IT products and services last year, and the figure for Thailand was about $1.3bn.

Western IT vendors are facing saturated markets in developed countries, and are looking to the huge untapped market in developing nations for future sales growth.

"The Thailand and Indonesia small business markets remain lucrative opportunities for hardware vendors because of the largely un-penetrated markets, " said the AMI report.

However, many potential buyers in these regions cannot yet see the benefits of IT, and educational outreach by vendors and authorities is required to drive sales. Over 70 per cent of small businesses in nations like Thailand and Indonesia do not have a computer.

"These small businesses need help understanding how PCs can be applied to their individual business because they fail to see the relevance," said AMI senior analyst Jackie Chan.

"They generally perceive computers to be somewhat useful for a few specific tasks like accounting and word processing, but fail to understand how IT can play a key role in their overall business strategy."

Much of Asia is ripe for a technology sales boom, but only if potential buyers can be convinced of the benefits.

On a recent visit to Malaysia, Microsoft chief executive Steve Ballmer told local media how the company is assisting the government with an official education programme that aims to provide 2.8 million of the nation's rural residents with training and access to IT by 2008. 

"With 18 per cent computer penetration in Malaysia, we hope that the new affordable multilingual Windows XP Starter Edition will attract more people in using computers, especially in their own native language," Ballmer said.

For now, the product lines which are likely to see strong sales in this sector are cheaper, simpler essentials like PCs and printers, not sophisticated web servers or networking hardware.

"Currently, 50 to 60 per cent of their spending centres on procuring basic computing hardware," said Chan.