U.S. SMBs Set To Spend $2.2 Billion On Software This Year

NEW YORK—(BUSINESS WIRE)—Feb. 22, 2006— Small and medium businesses in the United States are on track to spend $2.2 billion on enterprise software this year, up 10% from last year. Fueling this growth will be the continued demand for ERP (enterprise resource planning) and CRM (customer relationship management) solutions, especially from medium businesses, according to the latest report from AMI-Partners.

"More MBs in the U.S. now seek to streamline and automate business processes and thereby maximize the value from their current assets," says Sau Lam, New York-based Research Analyst at AMI-Partners. "The healthy growth for enterprise software spending comes mainly from MBs with 100-999 employees. Many of these MBs also want to ensure they meet new regulatory requirements and see automation as the best way to do that."

Medium Businesses, the Sweet Spot for ERP and CRM Vendors

ERP is becoming a mainstream application for MBs. Currently, 31% of MBs use ERP solutions. Demand is also more prevalent among MBs, with close to a quarter of MBs indicating their interest in adopting ERP solutions in the next 12 months. Top ERP brands include Microsoft Great Plains, Best Software and Oracle. CRM adoption is also higher among MBs than among SBs. Over half of MBs currently use and/or plan to use CRM solutions in the next 12 months, compared with 23% of SBs. Although ACT! and other packaged software offerings are most prevalent, survey data shows salesforce.com gaining traction in both small and medium businesses. Adoption of hosted, software-as-services (SaS) solutions is low, but growing. A majority of SMBs have yet to embrace the software as services model, but pervasive high speed Internet access, growing awareness and wider availability of products will fuel future growth across many application areas. Currently, less than a fifth of SBs and 27% of MBs use or plan to adopt SaS and hosted applications.

AMI-Partners' latest report, 2005-2006 U.S. SMB Applications & Solutions Market Overview and Assessment, provides an overview of business applications and solution use among small and medium businesses in the U.S. The focus is on adoption and spending on ERP, CRM, accounting software, outsourcing, hosted and software as services solutions by employee size and vertical industries.

About the Study

AMI's 2005-2006 U.S. SMB Applications & Solutions Market Overview and Assessment study highlights these and other major trends in the context of current/planned IT, Internet and communications usage and spending. Products and services covered include established and emerging hardware, software, applications and business process solutions. Based on AMI's annual surveys of SMBs in the United States, the study tracks a broad spectrum of issues pertaining to budgets, purchase behaviors, decision influencers, channel preferences, outsourcing, service and support. Also covered are detailed firmographics and critically important technology attitudes and strategic planning priorities. These data point to key opportunities and messaging hot buttons for vendors and service providers seeking to match their offerings to SMB market requirements.

For more information about this study, AMI-Partners, or our global SMB research, please call AMI-Partners at 212-944-5100, e-mail ask_ami@ami-partners.com, or visit the AMI Web site at www.ami-partners.com.

About AMI-Partners

AMI-Partners specializes in IT, Internet, telecommunications and business services strategy, venture capital, and actionable market intelligence -- focusing on global small and medium business (SMB) enterprises. The AMI-Partners mission is to empower clients for success with the highest quality data, business planning and "go-to-market" solutions. AMI was founded in 1996 under the name of Access Media International (USA), Inc. by Andy Bose, formerly group vice president at IDC. Since its inception, the firm has built a world-class management team, each with ten to fifteen years' experience in IT, telecom, online communications or multimedia.

AMI-Partners has helped shape the go-to-market SMB strategies of more than 150 leading IT, Internet, telecommunications and business services companies over the last ten years. The firm is well known for its IT and Internet adoption-based segmentation of the SMB markets; its annual retainership services based on global SMB tracking surveys in more than 20 countries; and its proprietary database of SMBs and SMB channel partners in the Americas, Europe and Asia-Pacific. The firm invests significantly in collecting survey-based information from several thousand SMBs annually, and is considered the premier source for global SMB trends and analysis.

Sau Lam, 212-944-5100 ext 531

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Media Relations (In New York): 
Nancy Carty, 212-944-5100 ext 581

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