REDMOND, Washington, October 29 /PRNewswire/ --

- Global study of small businesses reveals growing demand for software as
a service.

Microsoft Corp today launched the results of a global study looking at
how small businesses use and manage their IT, as well as their attitudes
towards hosted IT services. The research highlighted that many small
businesses struggle to compete with big businesses and are unsure of how to
get access to higher-quality IT services that could help them. Government
support is often widely used and well-received, but in some cases, it is
thought to be too limited. Small businesses face numerous challenges with IT
but are also seeing the benefits that mobile working and social networking
can bring.

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Despite global concerns about an economic slowdown, most small businesses
reported that they had performed well in the past year. Globally, 39 per cent
of businesses had grown, while 36 per cent had remained steady in the past
year. Hosted IT solutions appear to offer some of the answers raised by the
small businesses surveyed. Not only does buying software on a subscription
basis reduce the reliance on IT skills and offer enterprise-class security
protection, but it enables businesses to focus on other business priorities.

The research also highlighted that some emerging markets are outpacing
western countries in terms of new technology adoption. About 87 per cent of
Russian small businesses surveyed have branded company e-mail, while 63 per
cent have a customer database and an above-average 24 per cent use mobile
e-mail. Similarly, Russian small businesses are the most likely to have IT
(97 per cent), while fewer (91 per cent) US small businesses used IT.

Meanwhile, 67 per cent of Chinese small businesses use social networking
applications to talk to existing customers and 57 per cent use them to
promote their business. That compares with just 26 per cent and 24 per cent,
respectively, of small businesses in the UK -- typically seen as a mature
market -- that use social networking to talk to existing customers or promote
their business. The research also found that 65 per cent of the small
businesses surveyed would consider buying IT services on a subscription
basis, such as hosted e-mail, shared calendaring and other applications.

"Despite their varying businesses and greatly differing needs, many small
businesses are becoming increasingly dependent on information technology and
the internet for networking, communications and sales. As they become more
web-savvy, we're seeing that small businesses are starting to seriously
consider hosted services to meet some of their IT needs," said John Zanni,
general manager, Software + Services Industry team, for the Communications
Sector at Microsoft. "At this time of economic uncertainty, the benefits of
buying IT services on a subscription basis become ever more apparent."

The research, which surveyed small businesses' attitudes on a range of
areas, also found that many have "IT envy" for the resources of larger
businesses. A vast majority -- 79 per cent -- think that larger businesses
gain significant advantage from having access to better IT resources. Despite
this, 37 per cent still use web mail, such as Hotmail, Gmail or Yahoo!
services, rather than business e-mail services such as Microsoft Hosted
Exchange.

Meanwhile, small businesses' main priority -- managing relationships and
customer service -- was found to be highly dependent on IT, because 89 per
cent of firms also agreed that professional communications are important to
their business.

Other findings from the research indicated that small businesses desire
more developed capabilities for security and mobile services, with 56 per
cent of small businesses indicating they would prefer to have more protection
from viruses and spam. Meanwhile, 44 per cent of small businesses believe
they would benefit from mobile e-mail and shared calendar functionalities.

"Today, using hosted software and services is an efficient way of getting
high-quality and professional communications services at a predictable cost
without the need for upfront investments or time-consuming implementations or
maintenance. As businesses can pay on a per-user, per-month basis, they can
greatly reduce the cost, while still gaining enterprise-grade professional
communications services such as mobile e-mail," said Michael Korbacher,
director, EMEA Web and Application Hosting, for the Communications Sector at
Microsoft. "Microsoft envisions a world of software plus services that
consists of a broad blend of traditional applications and services available
over the internet. As small businesses become more and more
internet-literate, the case for using software online will drive strong
demand for service providers."

Key findings from the research include the following:

-- Half of the small organisations were found to receive some kind of
information or support from public services or government bodies. The
exceptions were Russia, where the figure is 32 per cent; Italy, where it is
39 per cent; and Japan, where the figure is 40 per cent.

-- Overall, 61 per cent of respondents said that professional-looking
communications were either "critical" or "very important". Swedish, Russian
and Australian small businesses are especially keen to promote the
professional image, while Japanese and Chinese small businesses thought it a
lower priority.

-- While only 15 per cent of respondents noted "IT issues" as one of
their top three time-consuming activities, in certain countries this task was
seen as much more time-consuming -- for example, in Sweden and Canada.

-- Sweden was seen to be at the vanguard of IT utilisation among
respondent countries, with above-average adoption of technologies such as
mobile e-mail, company-branded e-mail, customer databases and e-commerce
websites. The UK and Russia also scored highly, with China and France showing
less adoption of technologies.

-- The US and France are the countries where small businesses are most
likely not to have any IT, both at 9 per cent. Only 3 per cent of Russian
small businesses have no IT.

-- Most of the time, IT support is provided by either the respondent or
by someone within the organisation, either a professional or an amateur.
Occasionally, small companies will recognise that they need to invest in
professional IT support; as suggested earlier, this is particularly so in
Australia, where 34 per cent of respondents used an external IT service and
support company.

-- The local or national retailer of IT support is very important in this
context, as is the online merchant. Around 89 per cent of the respondent
organisations use one of these three sources. While the British and French
respondents use online more than most, Australian and Japanese organisations
seem to prefer the local IT provider.

-- Overall, 65 per cent of respondents said either "yes" or "maybe" when
asked if they would consider using a hosting service.

-- About 47 per cent of small businesses in total said their business
would be better if they had more IT resources. Russian (72 per cent) and
Chinese (83 per cent) small businesses felt most strongly about this,
suggesting that small businesses in those countries felt IT provided a
competitive enablement and advantage.

-- About 58 per cent of small businesses revealed they use IT skills
in-house, while 63 per cent (in another question) said they believed larger
enterprises with more IT resources gain a competitive advantage. Swedish
small businesses were most likely (23 per cent) to employ an IT specialist,
while many Canadian (20 per cent) small businesses also employed an IT
specialist. About 34 per cent of Australian small businesses used outside IT
services and support, much more than any other country.

About the Research

The research report "Microsoft Global Small Business Index, October 2008"
was executed by Vanson Bourne Ltd (http://www.vansonbourne.com) between May
and July in 2008. The research questioned more than 1,300 small businesses,
including at least 100 in Australia, Canada, China, France, Germany, Italy,
Japan, Sweden and Russia, plus 200 in the UK and the US. A copy of the full
research report is available through mscsemea@webershandwick.com.

About Microsoft

Founded in 1975, Microsoft (Nasdaq: MSFT) is the worldwide leader in
software, services and solutions that help people and businesses realise
their full potential.

About Microsoft EMEA (Europe, Middle East and Africa)

Microsoft has operated in EMEA since 1982. In the region Microsoft
employs more than 16,000 people in over 64 subsidiaries, delivering products
and services in more than 139 countries and territories.

This material is for informational purposes only. Microsoft Corp
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