According to a Nasscom study, conducted by research firm Frost & Sullivan (F&S), Indian small and medium businesses (SMBs) spent about Rs 47,200 crore (USD 8.7 billion) on IT in FY2013.
Of this, 45 per cent was spent on hardware, while 40 per cent was on IT services (implementation, support and training) and 15 per cent was on software licensing and software as a service (SaaS).
He added that Indian IT players also need to create specific solutions for the SMB sector, tailor-made to suit their specific needs, he added.
"We have proposed to the government that money spent on technology by the SMBs should also be considered among the investments done by them and give them incentives," he said.
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Chandrashekhar added that there is also a need to set up collaboration platforms for industry players to share best practises, enable easier access to funding and network with like-minded people to create innovative IT solutions.
"Of the overall technology solutions available, cloud adoption will be a key element to transform the ecosystem. Advantages like low capex, lesser total cost of ownership and easy data management is attracting SMB players," Microsoft India General Manager SMS&P Meetul B Patel said.
He added that various stakeholders including government, industry associations and players need to work jointly to encourage IT adoption and increase awareness of existing IT solutions.
The report said SaaS adoption by SMBs in India is growing at a CAGR of over 25 per cent and is expected to reach Rs 2,000 crore (USD 370 million) by FY2018.