Compliance drives SMBs' tech investment in Japan

The need for compliance with J-SOX, Japan's version of Sarbanes-Oxley legislation, has become a factor in Japanese SMBs' purchase decisions for new infrastructures, solutions, and services, said Springboard Research.

Compliance-related investments by Japanese SMBs are set to overtake those by large enterprises in the next two-three years, the research house added.

According to Springboard's report, titled "Japanese SMB IT Market Dynamics (2008) & the Impact of J-SOX", 30 percent of Japanese SMBs surveyed by the firm plan to increase their IT spending on solutions related to information security and "internal control" in the coming year, directly related to compliance requirements. The report's findings are based on a survey of 1,210 SMB CIOs, IT and line of business managers across Japan conducted by Springboard's strategic Japan partner, Nork Research.

"J-SOX may play an increasingly significant role in shaping SMB demand for IT systems in upcoming years," said Jonathan Silber, research manager at Springboard Research. "Hardware and software IT solutions that address compliance concerns will be in greater demand over the next year as Japanese businesses bear the brunt of heightened pressure from business partners, shareholders and consumers to implement better internal controls."

Slowdown in Hardware and Software

According to the report, the server market in Japan will see nominal growth as SMBs are increasingly looking to consolidate and merge their existing IT infrastructure, as opposed to purchasing new equipment. Replacing problematic systems and upgrading from legacy systems were cited by survey respondents as the primary reasons for adopting servers in 2008. Survey result also indicated that fewer SMBs have plans to purchase servers in 2008, following trends from 2006 and 2007.