Redback Networks Australia and New Zealand country manager Ray Aguilera said the purchasing decisions of its customers, typically Internet Service Providers, are influenced by many industry issues.

"We are still mowing it over. There has been many factors playing on telcos in recent history like the NBN (National Broadband Network) and changes in regulation and services," Aguilera said.

"I don't know if the incentive is enough for smaller ISPs to invest given that there are bigger things happening."

Hewlett Packard personal systems group manager Janice Cox said in an e-mail statement the tax break may be a lifeline to small companies struggling in the global financial crisis.

"This announcement is a real demonstration of support by the government for small businesses. It comes at a time of tight lending and exceptionally challenging business conditions," Cox said.