Channel "in flux" despite increase in SME IT spend

Market watcher AMI has predicted that global SME IT spending will continue to beat that of large enterprises in 2007, but claimed the channel is in a ‘state of flux’.
In a report entitled Top ten IT trends for global SMB markets, AMI has unveiled a list of what it considers to be top business hotspots for SMEs in 2007, but claimed VARs and system integrators are struggling to adapt to the changing market demands and the evolving business models of IT vendors.
The report said: “Channel partners will need to invest in building integration and business consulting skills to maintain market advantage. Traditional VARs, DMRs and distributors need to re-examine their offerings and become service providers.”
SME IT spend is set to grow 10 per cent according to AMI, particularly in countries such as Brazil, Russia, India and China. Europe and the UK have already seen SME spending overtake enterprise spending, AMI claims, but other emerging economies such as Thailand, Malaysia, Vietnam, Pakistan and South America will see the same trend.
Storage and security convergence will continue to push growth, as smaller firms prefer to adopt dual-purpose solutions in line with their restricted budgets, according to the analyst.
Similarly software-as-a-service (SaaS) will play a key role in the SME market, AMI claims, as SaaS vendors focus on how their products will help end-users streamline their business processes for market advantage. AMI predicts SaaS spending will increase by 19 per cent over the next five years.
Managed  services will become even more prevalent in the SME sector as smaller firms look to offload cumbersome IT chores to outside experts to enable them to focus on their core businesses. As a result AMI predicts that major vendors will get more involved during the year.
“Historically most SMEs have turned to smaller local players for these services, but in 2007, major vendors such as IBM, Hewlett-Packard and others, with increasingly capitalise on this opportunity,” AMI said in its report.
“These giants will expand their managed services portfolios with new infrastructure, help, desk, storage, security and other offerings, tailored to meet SME solution, packaging and pricing requirements and sold via their channel partners.”
AMI also predicts that the traditional IT services market will continue to see double digit growth in 2007 among global SMEs and this will boost the IT outsourcing market. Business-as-a-service (BaaS) will also become more popular, the analyst claimed.
During 2007 SMEs will become more mobile and AMI is predicting that global SME notebook shipments will grow by 20 per cent in 2007, outpacing desktop PC growth by five to one. This combined with a smartphone shipment growth of 18 per cent will see smaller firms become more dependent on mobility and convergence as the use of public wireless internet will grow by more than 30 per cent.
The seventh trend predicted by AMI is a reluctance by SMEs to adopt the much-hyped Vista operating system. Less than seven per cent of small businesses in the US alone plan to upgrade to Vista, AMI claims.
Voice over IP (VoIP) will become another popular SME adoption and hosted VoIP adoption will increase among the five to 20 employee segment over 2007 as the solutions become more reliable, secure and scalable, AMI claims. The analyst forecasts that IP PBX penetration among SMEs will grow by 67 per cent in 2007 and penetration in hosted VoIP-based systems will grow by 75 per cent.
Finally web-based operating systems will see greater takeup as more developers open up access to their technology platforms infrastructure, tools and knowledge base.