AMI-Partners Study Shows U.S. SMBs Spent $1 Billion on Enterprise Software in 2003; Total U.S. Business Spending for Enterprise Software Exceeded $2.7 Billion in 2003

AMI-Partners Study Shows U.S. SMBs Spent $1 Billion on Enterprise Software in 2003; Total U.S. Business Spending for Enterprise Software Exceeded $2.7 Billion in 2003

Business Editors/High-Tech Writers

NEW YORK–(BUSINESS WIRE)–June 2, 2004

SMB Opportunity Still Largely Untapped by Vendors

A new AMI-Partners study, “2003 U.S. Enterprise Software Market Overview and Assessment,” reveals that total U.S. business expenditures for CRM, SFA, ERP and SCM solutions reached $2.7 billion in 2003, accounting for over a third of worldwide spending in this market. U.S. small and medium business (SMB) spending on CRM, SFA, ERP and SCM amounted to $0.99 million during 2003, while large businesses invested a total of $13.6 billion on enterprise software. AMI forecasts that large businesses will increase spending on enterprise software by 4.9% annually in the coming years, while SMBs will raise spending in this area at a staggering 14.3% compounded annual growth rate.

SMBs have historically been underserved in the enterprise software market, with only about one-in-ten SBs and one in 4 MBs deploying CRM/SFA solutions, and less than 5% of SBs and roughly 20% of MBs using ERP/SCM solutions. However, increased SMB demand will be fueled by renewed vendor attention and the increasing availability of “pay-as-you-go” on demand hosted solutions tailored to SMB customer needs. AMI’s latest surveys indicate that over 380,000 SBs and 27,000 MBs in the U.S. view implementing CRM/SFA/ERP/SCM solutions as an important strategic focus area for the next 12 months.

“To capitalize on SMBs’ growing interest in these solutions, vendors need to fully grasp the differences in how SMBs and large businesses view enterprise software,” said Laurie McCabe, Vice President, SMB Insights and Business Solutions of AMI Partners. “Vendors targeting the SMB market must understand the different levels of IT awareness, adoption, sophistication for these solutions within different SMB market segments and sub-segments, and tailor products, marketing and channels initiatives accordingly,” added McCabe. “Most SMBs still need a lot of education as to how enterprise software solutions can help their businesses”, said Jackie Chan, Senior Analyst at AMI. “While large enterprises are witnessing and understand IT’s contribution to their bottom-line, many SMBs remain skeptical that investing in enterprise software solutions will drive business growth and productivity.”

Key findings presented in this report include:

— U.S. enterprise software spending reached $14.6 billion in

2003 with CRM/SFA forecast to have the highest growth rates in

the next 5 years.

— SBs rely heavily on homegrown solutions for both accounting

and sales force automation needs today.

— MBs increasingly use third-party application hosting services

to alleviate deployment, maintenance and management

responsibilities.

— Among large businesses, CRM/SFA penetration leapt from 37% in

2002 to 54% in 2003, with call center, forecasting and account

knowledge cited as the top 3 feature sets deployed.

— The SMB ERP/SCM market is extremely fragmented, indicative of

many SMBs needs for industry-specific solutions.

— Channel partners play an important role in their customers’

brand selection, and tend to be more influential to MBs in

software brand selection.

This AMI study, 2003 U.S. Enterprise Software Market Overview and Assessment, examines the enterprise software market based on input from more than 1,450 small, medium and large business IT decision makers in the U.S. The study analyzes current usage, plans and channels for aggregate software, accounting software, CRM/SFA software, ERP/SCM software, middleware software, collaboration software, and provides insights to other applications usage trends, market size and background demographics. By furthering vendors’ understanding of the enterprise software market landscape, this report will help them sharpen their marketing, positioning and channels programs.

For more information about this study, please call AMI-Partners at 212-944-5100, email ask_ami@ami-partners.com, or visit the AMI Web site.

For more information on AMI-Partners or our Global SMB surveys please visit www.ami-partners.com or call 212-944-5100.

About Access Markets International (AMI) Partners, Inc. (AMI-Partners)

The above findings were released today by New York-based Access Markets International (AMI) Partners, Inc., a leading consulting firm specializing in IT, Internet, Telecom and business services market intelligence, trends and strategy with a strong focus on global small and medium business enterprises. AMI conducts the IT industry’s most comprehensive annual tracking surveys of small and medium business (SMB) enterprises in several countries including the U.S., Canada, France, Germany, U.K., Australia, China, India, Japan, Singapore, South Korea, Brazil and Mexico.

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 the firm’s clients for success with the highest quality data, business planning and “go-to-market” solutions. AMI-Partners was founded in 1996 under the name of Access Media International (USA), Inc. (AMI-USA) by Andy Bose, formerly a group vice president at IDC. Since its inception, the firm has built a world-class management team spanning 10 to 25 years in IT, telecommunications, online communications, and multimedia. The team is comprised of individuals who formerly built careers at leading industry-companies such as ADP, Cablevision, Compaq, IBM, IDC, Gartner, McKinsey, and other major corporations.

AMI-Partners has helped shape the go-to-market SMB strategies of more than 130 leading IT, Internet, Telecom and business services companies in the last seven 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; and its proprietary database of several thousand SMBs in the U.S., Canada, Europe, Asia-Pacific and Latin America. The firm invests significantly in collecting survey-based information with several thousand SMBs globally through the industry’s most comprehensive SMB survey instrument, and is considered to be the leading benchmark for tracking SMB trends.

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