The U.S. economy roared ahead in the final months of 2009, growing at its fastest rate in six years, as corporate America stopped slashing its inventories and again started to invest for the future.

Gross domestic product, the broadest measure of economic activity, rose at a 5.7 percent annual rate in the fourth quarter, the Commerce Department said Friday. That is the highest pace of growth since 2003, and it constitutes strong proof that the recession reached its end earlier in 2009. It was also a surprisingly positive result, well above the 4.6 percent rate of GDP growth forecasters had expected.

Some of this is just an adjustment from the prior quarter, the article notes:

But there remained reason to doubt how strong the economic recovery will be in 2010. The biggest component of the GDP growth was a steep drop in the pace at which businesses were cutting back on their inventories. Firms reduced their inventories by $33.5 billion in the fourth quarter, compared with $139 billion in the third. In the math of GDP, which attempts to capture the value of goods and services produced within U.S. borders, that added 3.4 percentage points to overall growth.

Read the whole story here:

Top 2010 ICT trends the industry isn’t talking about in the global SMB markets were released today by AMI-Partners.

Much attention has been given to 2010 trends such as the increasing adoption of SaaS, managed services, virtualization and mobile applications. Although AMI acknowledges most of these are well documented predictions, its team of go-to-market analysts have identified the following six (6) trends that the industry hasn’t fully explored.

Read the rest here:

Figure 1:

Need for Speed
No, I am not talking about the car racing computer game but referring to the need of SMBs for a better internet connectivity as they look to use audio & video conferencing, live presentations and other business application software to remain connected to their customers, real-time keeping a check on their travel expenses. This opens up numerous opportunities for the Indian Telecommunication Services Providers.

Not only the SMBs, but large businesses also prefer to reach out to their clients with various means offered by these service providers, helping them save time and cost on travel. Wireless data & smart phones, live presentation, audio conferencing, video conferencing, and other collaborative tools which help them connect with their clients in real-time with no time lag.

One of the key strategic IT focuses for SMBs emerged during the Q2 survey of Q-Pulse from AMI: Improving Internet/ networking bandwidth speed to use web‐based applications and deploying automated CRM capabilities to improve customer relationship.

The Future of Telecom Spending and Mobility
AMI’s Quarterly Tracker (Q-Pulse) for Q2 reveals that Q3 is expected to have an increase of 6.6% in the ICT spending in comparison to the last quarter, which will make India one of the fastest growing SMB ICT market. The Indian SMB telecom market was approximately $6.1 billion in size in 2008; there are quite a few sub-sectors that are growing rapidly. Some of these are VoIP, WAN, conferencing, Unified Communication, IP PBX/ phones and PDAs. The market is likely to undergo significant changes with the introduction of services like 3G/ WiMax, etc. by all major players.

According to TRAI the number of mobile subscribers in India crossed the 400 million mark in April this year, and will reach its goal of 500 subscribers by the next year. Whereas the total telecom subscriber base comprising of wireless and wireline has reached 452 million till May 2009 and is expected to grow at a reasonable rate in the next few years.

Spending on telecom services will create more business opportunities, collaboration & time efficiency, and will also help businesses to reduce expenses. During this critical phase and limited spending by the businesses, there will be a heightened need to communicate, serve and maintain strong relationships with existing customers, their partners, and employees, and at the same time attracting new clients. Hence a possible rise is seen in the telecom spending as compared to the last year as per the recent study by AMI.

Telecom services comprise a huge majority of the overall telecom expenses (at over 90%); its share is likely to drop marginally by over two percentage points over the next 5 years. The remaining portion is made up by telecom equipment that shows a perceptible 4.5% CAGR. Within the overall SMB telecom expenditure pie, SBs account for around 80% and are likely to show a slight growth rate over the next five years.

The SMB sector will create an immense opportunity for the telecom service providers in the coming days as they gear up to provide a tailor made solution for small and mid sized companies to cater to their requirements and be pocket friendly. The most recent AMI study focuses on the critical business issues, challenges, opportunities for the telecom service providers and uncovers the facts to help businesses make more informed decisions.

“*companies with up to 999 employees.

Back in Oct/Nov 2008 timeframe we started seeing price (as a purchase trigger) shift a bit in terms of importance.  Don’t get me wrong, price was still important, but it was starting to become part of a bigger story about the real reason to purchase IT for SMBs.  Price, and even more so promotion, dropped in double digits (YoY) for key reasons to purchase IT like PCs.  As small and medium businesses started to first evaluate where they could cut costs (e.g. headcount and travel) they started to look at IT investments in the context of fulfilling on other needs such as helping them reduce telecommunications spending, improve productivity so they could get more work done with fewer people.  The story became bigger than just price/promotion.  SMBs wanted more from their IT purchases, but with clear ROI that mapped directly to running their business.

What we didn’t know back in October is that SMB’s cost cutting exercises evolved from targeting big obvious ticket items to more granular budget item cuts.   For example, back in October most SMBs were busy cutting FT/PT staff, bonuses and some benefits, but by late December over 64% of medium businesses planned to cut office supplies/printing supplies and 71% planned to cut travel costs (AMI Q Pulse Dec./Jan 2009).  Of course IT budgets (along with all budgets) were being cut as well.  But then something happened.  Something every IT marketer should be dancing on the roof tops about.  A window of opportunity opened that has been arguably shut (or at least very infrequently opened) in the SMB space.  That opportunity is solution selling.

Before you look at the calendar, or look at the post date of this entry to make sure it wasn’t posted during the late 90’s, please hear me out.  Now, more than ever over the last 15 years, SMBs are more receptive, more interested and more willing to explore and purchase IT solutions that deliver on business needs.    My case is that “solutions” are not just wanted by SMBs on the IT front they are required for two reasons:

1) SMBs have to (and are) finding ways to embrace new technologies that help them address their greatest pain points during the downturn.  I’ve heard this numerous times during interviews with SMBs who are looking at SaaS solutions and other technologies that just 6 months ago they would have completely ignored.

2) IT marketers will largely be unsuccessful in targeting SMBs unless they: a) resonate with these urgent pain points of SMBs, b) position their IT device/service as part of the bigger solution to target key verticals that do plan to spend and c) show a clear and tangible ROI of IT solutions that reach outside of traditional speeds/feeds of IT.   This broadening of value prop helps SMBs connect the dots that an IT purchase could alleviate other pain points that businesses are desperately trying to manage (e.g. reducing travel expenses by implementing VoIP solutions, web conferencing, etc.)

So what does this mean?  It means that the IT industry, marketing to the SMB market, has an opportunity and a challenge wrapped into one.  It goes something like this:

Make the solution sell that delivers on compelling/tangible promises to improve the business or be relegated to the constrained IT budget of SMBs.  The choice is yours.

The question is how to do this effectively.  One way is to identify those SMBs who plan to purchase and analyze how to get these more robust value propositions across to this high value group.  Often times these value props require more attention from customers during the purchase process.   For example, I am not just selling you a notebook I am selling you part of a POS system that can help you better optimize your inventory during the downturn or help you reduce your travel budget by $X.

During all of my years analyzing the SMB market I’ve never seen such clear distinction between those SMBs who ”don’t plan to purchase” from those who “do plan to purchase” IT.  In a recent AMI study we analyzed 3, 6 and 12 month planned IT purchases down to the category level.  The delta between the “high value customers” vs. the “low value” is astonishing but once you analyze where these SMBs tend to get their IT information from it becomes an even better story.  As it turns out, in some cases (e.g. U.S. SB PC market) “high value customers” are significantly more likely (between 10-12 times more likely) to use such marketing resources as social networking sites and blogs compared to low value customers.  The differences are striking, and the opportunity is huge because marketers can justifiably spend 3-5 times more on this high value group (and avoid low value customers) and still optimize their ROMI.

The economic downturn has opened a window of opportunity.  If marketers attempting to target SMBs manage to successfully take advantage of this situation we could see IT play an even more critical and integral role in the ways SMBs manage their businesses.

Who says the economic downturn isn’t a marketer’s dream?

Chad Thompson is the Vice President of Market Strategy at AMI-Partners and can be reached at CThompson@ami-partners.com