The Rise of the AI-Powered Asian SMB
- By CDOTrends editors
- February 05, 2024
Asia-Pacific's business landscape is transforming, with small and medium-sized businesses (SMBs) at the forefront of this change. According to a recent IDC report, by 2026, half of the medium-sized companies in the region, excluding Japan (APEJ), are expected to employ Generative AI (GenAI) applications to revolutionize marketing and sales processes.
This shift is not just about adoption but also about understanding and integration. Current trends indicate that 47% of the midmarket segment in APEJ is exploring or investing in GenAI technologies. Moreover, a significant portion of these businesses anticipate a major impact on marketing applications, highlighting the growing importance of GenAI in the business ecosystem.
The journey towards GenAI integration showcases SMBs' reliance on technology providers for ongoing support and updates without heavy investments in internal resources. This reliance is shaping the future of cloud providers as strategic partners, with over 40% of midmarket companies in APEJ seeing them as key allies in the next 12 months.
Investment trends also reflect a strategic approach to GenAI adoption. Approximately 48% of midmarket companies with 500 to 999 employees are setting aside budgets for training, GenAI-enhanced software, and consulting services, signifying this technology's thoughtful and planned integration.
Supriya Deka, senior market analyst at IDC Asia/Pacific, emphasizes the role of GenAI in revolutionizing business operations. “SMBs and midmarket segments will be accelerating their digitalization journey by embracing innovation and sustainability. Further, GenAI will revolutionize the way businesses operate by automating complex tasks and generating creative solutions in areas such as marketing, sales, and customer experience,” she states.
Aside from GenAI, there are other critical trends SMBs in APEJ need to focus on. These include investments in sustainability technology, data analytics for cloud investment evaluation, proactive measures against cyberattacks, and an increase in public cloud technologies. Additionally, by 2027, 40% of medium-sized businesses are expected to ramp up investments in analytics to enhance business outcomes.
Moreover, new business creation in the region is anticipated to leverage 5G and fixed wireless access, with 20% of new small businesses depending on them for critical connectivity by 2026. The IDC report noted that the higher dependence on these technologies indicates a broader trend where a segment of SMBs in APEJ could account for over half of the SMB technology spend by 2025.
Image credit: iStockphoto/SergeyNivens