Earlier, it was difficult for small businesses in India to invest in information technology due to the nature of cash flows. However, these days, they were able to use IT tools including e-mail, an operating system, anti-spam, storage, and Office online services. These were used from about Rs. 250 per user per month.

A pay-per-use model was launched by Microsoft and the Tirupur Exporters’ Association (TEA). SME sector was targeted by their project called Project Vikas. Hosted services were planned to be provided to SMEs. In 2008, an e-readiness centre was set up by them. The project planned provision of online desktop by Airtel for allowing users to connect with a PC and Net connection. Tools such as Windows operating system, Microsoft’s Office, storage space of 10GB, and anti-spam software could be used by this solution.

Unified communications were provided by Wipro which promotes single interface across multiple locations. Complexity for user-organization could be reduced by unified communications. E-mail solutions for users were provided by Global Outlook.

It was found that only one-third of the total small businesses in India used IT for development of business. There was low penetration due to the lack of realization of requirements of SME sector by the IT industry. Number of people to maintain IT systems are lesser in small businesses. Also, capital expenditure capability of small businesses is small. So payment for IT solutions must be based according to the usage which resembles payment of electricity or a phone bill.

It was explained that suppose Microsoft exchange was bought and hosted by a company for use by 100 employees, then there would be a capital expenditure of about Rs. 20 lakh in addition to monthly expenses of about Rs. 60,000. Contrast that with a hosted model, where only Rs. 25,000 could be paid by the end-user company for using the same tools by same number of employees.

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