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—About 40% of Russia 1m SMBs are currently equipped with PCs, says AMI—
Small and medium businesses (SMBs, or companies with up to 999 employees) in Russia and Poland are on track to spend about US$10 billion on ICT (IT and telecom) in 2008, up some 15% over 2007. Both Russia and Poland have been experiencing significant growth over the last few years and are the two largest Eastern European markets by GDP (purchasing power parity) followed by the Ukraine, Czech Republic and Romania.
This is according to studies by New York-based Access Markets International (AMI) Partners, Inc. “About 40% of Russia’s one million SMBs are currently equipped with PCs, and generate the highest ICT spending in the region,” says Pauline Courtiau, New York-based Analyst at AMI-Partners. “About one third of this amount is spent on computing—in areas such as desktop and notebook PCs, peripherals, servers, printers and handheld devices.”
Russia has also been experiencing significant growth as a provider of IT outsourcing and software development, thanks to a vast pool of talented workers. This growth is attracting companies to set up their R&D centers in Russia and to make it an outsourcing hub. All of which leads to a greater need for networking and security products as Russian SMBs must adapt to their western clients’ technology standards.
Since its accession to the EU (European Union) in 2004, Poland has been growing significantly and is regarded as a market with high potential in Central and Eastern Europe, mainly due to Poland’s size and strategic location. Poland is home to about 674,000 SMBs, of which almost half use PCs. SMBs in Poland are on track to spend about US$3.5 billion on ICT in 2008, up some 14% over 2007.
“In comparison with Russia and Poland, the Czech Republic is a smaller market with just 280,000 SMBs,” Ms. Courtiau says. “However, it is considered the most mature IT market in Eastern Europe with about an 80% PC penetration in SMBs. The country spends slightly more than Poland’s SMBs on ICT products and services.”
While the overall ICT spending by Eastern European countries is still small in comparison with their western counterparts, huge opportunities are available as companies are building their infrastructure and are still ripe for most brands and technologies. For example, white box desktops and servers are prevalent in Eastern Europe. However, an increasing number of SMBs are starting to switch to branded products, especially HP and Acer.
“The market for notebook PCs is already brand-conscious as SMBs trust brands more to fulfill their mobility and after sales services needs,” says Ms. Courtiau. “Acer, HP and Toshiba notebooks are gaining the most traction.”
In Eastern Europe, the majority of SBs are still in Wave One of technology deployment, where they focus on building their basic infrastructure. MBs have already passed that stage and have entered Wave Two, in which they work on connecting the enterprise by increasing their network capabilities.
With increasing business transactions in EU countries, a growing number of SMBs in Eastern Europe have to comply with EU standards, such as EU data protection laws and legislation such as Basel II and SEPA, that require businesses to satisfy minimum security and networking requirements. These business requirements are stimulating IT deployment across the region and are one of the stepping stones towards the third wave of technology deployment, in which companies connect outside their enterprises, to channel partners and suppliers, and aim toward full ICT convergence.