Small and medium businesses in Australia are on track to spend over US$1.8 billion on beefing up their Internet-related technologies, up some 5% from 2007. By 2009, it is estimated that SMB spending will go up marginally to US$1.9 billion on Internet-enabling technologies, according to a study by New York-based Access Markets International (AMI) Partners, Inc.

"Over 60% of the current Internet spending is devoted to Intranet, web hosting and development-related categories, and the remainder is spent on Internet-access areas," says Pompa Das Gupta, Analyst at AMI-Partners. "In terms of Internet adoption, Australia is one of the leading countries for SMBs who embrace this technology. The low density of population, geographic isolation from international markets and the distance between domestic population centers are key drivers forcing Australian SMBs to go online to overcome the hurdles of distance."

In the case of Australia MBs (companies with 100 - 999 employees), website usage is likely to reach near-saturation levels as these businesses become more aware of the multiple benefits of possessing and maintaining websites. SB (companies with up to 99 employees) penetration however, is much lower; about 40% of SBs are yet to own a website. Most SMBs host their websites on ISPs or other providers’ web servers, rather than on in-house company servers.

Australia SMBs place more emphasis on website hosting/maintenance compared to website development. Intranet usage is moderate; currently, close to 30% website-owning SMBs have an intranet in place. Most prefer to host their own intranet rather than using a third-party provider. In Australia a typical MB spends approximately five times as much on an intranet as a typical SB spends. Australia MB intranet usage is estimated to reach near-saturation next year. However, SBs have a long way to go; they are likely to reach intranet penetration levels of just over 25% in the same timeframe.

E-commerce is widely accepted by the Australian SMBs as a way to make business transactions easier and simpler. The future of e-commerce in Australia looks very optimistic. With significant plans for increased activity, e-commerce is likely to be used by almost 50% of Australian website-owning SMBs by end of next year. Annual sales revenue from e-commerce transaction is likely to display an upward sloping curve – as typical SMBs expect their average annual e-commerce revenues to rise by more than 16% next year. The preferred transaction-processing method for e-commerce is using secure credit card processing methods, in addition to transactions conducted via telephone.

"Internet marketing can benefit SMBs by increasing their sales, attracting new customers, reducing advertising costs and above all improving their corporate image," says Ms. Das Gupta. "The high GDP per capita, high adult literacy rate and positive attitude towards technology implementation are favorable factors for e-commerce adoption by more & more SMBs in Australia."