Yet finding products that are easy for small enterprises to set up and get running isn't easy.
Here's how some enterprise vendors are trying to redefine the enterprise and how some customers are taking advantage.
IBM has Express products in many lines of business that target small enterprises. More are on the way.
In May, the company announced blade and storage offerings for small and midsize businesses and, in April, announced a new small mainframe.
IBM's services wing is leading the charge, vowing to package solutions of hardware, software and services that can be sold to many different users with little modification.
In one case, IBM was able to scale itself down to the right level by offering an inexpensive Linux-based blade package with enough support to get the job done.
Matt Welker, chief technology officer at CORE Feature Animation, a 100-employee company that creates animation effects for movies, wanted to build a rendering farm to create animation effects for the Disney movie "The Wild" and was seeking a cheaper approach than his company's previous vendor, SGI, had.
"IBM was the only [vendor] that gave us the full support we required. They made it like a turnkey operation," said Welker in Toronto. "With SGI in the past, we didn't see the same level of attention."
But IBM doesn't always get it right. FoxHollow's Miller said IBM's approach is still too large-scale and too IBM-centric.
"We don't need Notes Domino, and they want to sell you the suite of products from IBM," Miller said.
"They should contact me and say, 'We've got some solutions that are appropriate for a company your size that would help solve specific business problems.'"
Although Miller said he sees signs of improvement from IBM, FoxHollow still does not use any IBM products or services.
Oracle is similarly eager to close deals with the little guys. The push goes back a year and a half, said Willie Hardie, vice president of database product marketing at Oracle, in Redwood Shores, Calif.
A significant step was the release of Oracle Database 10g, which includes streamlined installation and administration features.
Oracle offers two scaled-down versions of the flagship product: the very basic Express Edition and the more advanced SE 1, which includes support for two CPUs and some features of the high-end Enterprise Edition, including unlimited database size, support for 64-bit systems and cluster failover.
One customer, Enetrix, which offers hosted e-commerce solutions that measure customer feedback, chose to build its offerings on SE 1 on top of Microsoft Windows.
"[SE 1] had the features we needed. It's four times the cost to go with Oracle Enterprise," said Jody McDonough, vice president of product development and chief operating officer of Enetrix, in Middleton, Wis.
Read more here about Oracle adding support for the Microsoft .Net Framework and Windows Server System, including the SQL Server database, to Oracle Enterprise Manager 10g Grid Control.
SAP now has about 32,000 customers and is aiming to increase that total to 100,000 in the next four years, which will require a major push among small-enterprise customers.
At its Sapphire user conference May 16-18, SAP and IBM inked a deal that will increase the number of IBM channel partners versed in SAP software from 12 to 40 by the end of 2007. The partners will be selling scaled-down versions of SAP applications with fixed fees and implementation times and will focus on specific vertical markets.
The channel push with IBM comes as competitive opportunities appear among traditional midmarket competitors. JD Edwards, now part of Oracle, may be in a holding pattern in gaining new accounts.
As it is, Oracle is touting its Fusion plan to integrate its ERP (enterprise resource planning) lines, including those of JD Edwards. Many customers are sitting on the sidelines, awaiting the outcome.
Other midmarket ERP players are consolidating as well. Infor Global Solutions on May 15 acquired SSA Global, which had itself acquired a gaggle of companies in recent years. Lawson Software in June 2005 acquired Intentia, which focuses on the manufacturing market.
Microsoft, meanwhile, is moving up the food chain even as big players such as SAP try to move down. Webasto US, the North American unit of German auto-parts maker Webasto, considered SAP software for an ERP implementation. "To go to SAP worldwide would be cost-prohibitive, even with their lower-end packaging," said Andy Fralick, IT manager at Webasto, in Fenton, Mich. Instead, Fralick chose Microsoft's Xapta package. "Microsoft products work out of the box. I don't have to pay a roomful of consultants to get a usable product," said Fralick.
Microsoft has long been implementing a midmarket-focused ERP strategy, weaving together software acquired with Great Plains, Navision, Solomon and Xapta under its Project Green strategy for creating an extensive product line with many shared characteristics.
Fralick said SAP, despite its efforts at reaching smaller enterprises, has more work to do. "[SAP software's] problem is the same as its strength. It doesn't do a heck of a lot until you heavily customize it. SAP doesn't make its money selling software; it makes its money selling services. It's to its advantage to have you wedded to them for the rest of your life. As long as that's how they market, they will not get the SMB customers," said Fralick.
Small enterprises will get attention disproportionate to their size if they are growing at a rapid rate, which Fox-Hollow is doing in the hot medical technology field. Miller said FoxHollow's annual revenues jumped from $37 million in 2004 to $128 million in 2005.
FoxHollow also looks larger than its size because Miller has built a lab for testing IT solutions.
"You normally would not see that in the SMB space," said Miller. "But that's going to be changing, as people want to understand the impact of change on an environment. When you show a vendor you have an internal lab and a comprehensive change management system, they look at you like you're an enterprise customer and you get more respect, and the relationship develops at a faster pace."
Still, many large vendors are just at the beginning of the learning curve. "When I do get contacted by the large vendors," said Miller, "I usually get contacted by four or five people at the company—the left and the right hand rarely know what's going on."
Next Page: Moving to Smallville.
Moving to Smallville
Technology vendors are tailoring their wares to the needs of small-enterprise customers. Here's a roundup:
* SAP on May 17 at its Sapphire annual user conference in Orlando, Fla., expanded its reseller relationship with IBM and its channel partners to include several vertical-market implementations of MySAP All-in-One. SAP also offers Business One packaging of its ERP (enterprise resource planning) software for midsize businesses.
* EMC on May 11 bought Interlink Group, a services company specializing in Microsoft technologies and serving small-enterprise customers. EMC also has launched storage products and created a line of refurbished hardware and software for small-enterprise customers.
* Hewlett-Packard on May 9 announced new notebook computers in configurations and with financing plans aimed at small enterprises. HP also revamped its Web site to make it easier for small-enterprise customers to find information.
* Accenture on March 6 purchased key assets of Savista, a provider of BPO (business process outsourcing) services that cater to small-enterprise customers.
* Microsoft launched in November 2005 Premier Foundation, a 24/7 service priced at $30,000 and geared to small enterprises. Microsoft also recently launched Solution Finder, a Web-based service to help customers find partners (microsoft.com/midsizebusiness).
* Oracle, which began a small-enterprise push in earnest about two years ago with its SE 1 database, is considering a version of its Fusion project next-generation ERP applications that would be tailored to small-enterprise customers.
* Sun Microsystems is aiming its on-demand grid computing service at small enterprises. Sun has signed nearly 1,000 customers for the service.
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