Small Business: A Tough Nut to Crack

By Frank Ohlhorst  |  Print this article Print


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Dealing with small businesses is a complex and difficult task. What makes them so special?

Vendors and their partners have put much effort into tapping the small-business IT market. After all, it makes sense to pursue this space, which makes up more than 70 percent of business in the United States. But there seems to be a major problem fully addressing the needs of those companies and getting small-business owners to loosen their purse strings for technology investments.

I have spoken to many VARs about this very subject, and most agree on one thing: Vendors have to stop looking at the small business as a "little enterprise." Selling solutions into the small-business market takes much more than just shrinking down an enterprise product to fit the needs of a reduced user count. Vendors need to think about that when developing, pricing and delivering products. What's more, if a VAR is focused on small business, the vendor needs a channel program that fits a lower volume and lower revenue model and offers additional support.

That is especially true when one considers the ultrasmall or home-based business with fewer than 10 users. The key here is the user count, not the overall employee count. What makes those types of businesses so unusual and difficult to deal with?

First off, SOHO (small office/home office) business owners look at every expense as if the money is coming out of their own pockets—and, in many cases, it is—instead of the business operations budget. Second, most SOHOs don't have a formal budget; many fly by the seat of their pants. That, in turn, creates a feast-or-famine style of business. In other words, VARs need to hit those businesses with new technology solutions during the feast stage, when money is readily available. Third, most SOHO owners are very protective of their data, so VARs looking to act as an MSP (managed services provider) or sell SAAS (software as a service) are doubly challenged. Sure, those same SOHOs readily pay for phone, Internet and electrical service on a monthly basis, but there is a major difference between paying for utilities as opposed to IT services. With utilities, business owners have no choice in the matter; they must have their phone and electrical services. (Internet service is debatable.) SAAS, on the other hand, is considered to be just an alternative to technology that already works.

The irony here is that SOHOs can probably benefit the most by investing in technology and leveraging managed services. The trick for VARs is to demonstrate savings and reliability. On the savings front, it is much more economical for a small business to spend a few dollars per month per employee than it is to make a major capital expenditure for hardware and software. In addition, VARs can explain that managed services are a pay-as-you-go arrangement in which customers pay only for what they need and no more.

One final argument comes down to safeguarding data. While most SOHOs are fiercely protective of their data, they do little to back it up for safety. Here, SAAS, managed services and remote storage can keep the data safe and meet disaster recovery needs, all at a much lower price than that of a traditional solution. So when it comes to the small-business market, VARs should sell on the strength of new ideas and not products shrunk down from the enterprise.

Frank Ohlhorst Frank J. Ohlhorst is the Executive Technology Editor for eWeek Channel Insider and brings with him over 20 years of experience in the Information Technology field.He began his career as a network administrator and applications program in the private sector for two years before joining a computer consulting firm as a programmer analyst. In 1988 Frank founded a computer consulting company, which specialized in network design, implementation, and support, along with custom accounting applications developed in a variety of programming languages.In 1991, Frank took a position with the United States Department of Energy as a Network Manager for multiple DOE Area Offices with locations at Brookhaven National Laboratory (BNL), Princeton Plasma Physics Laboratory (PPL), Argonne National Laboratory (ANL), FermiLAB and the Ames Area Office (AMESAO). Frank's duties included managing the site networks, associated staff and the inter-network links between the area offices. He also served at the Computer Security Officer (CSO) for multiple DOE sites. Frank joined CMP Technology's Channel group in 1999 as a Technical Editor assigned to the CRN Test Center, within a year, Frank became the Senior Technical Editor, and was responsible for designing product testing methodologies, assigning product reviews, roundups and bakeoffs to the CRN Test Center staff.In 2003, Frank was named Technology Editor of CRN. In that capacity, he ensured that CRN maintained a clearer focus on technology and increased the integration of the Test Center's review content into both CRN's print and web properties. He also contributed to Netseminar's, hosted sessions at CMP's Xchange Channel trade shows and helped to develop new methods of content delivery, Such as CRN-TV.In September of 2004, Frank became the Director of the CRN Test Center and was charged with increasing the Test Center's contributions to CMP's Channel Web online presence and CMP's latest monthly publication, Digital Connect, a magazine geared towards the home integrator. He also continued to contribute to CMP's Netseminar series, Xchange events, industry conferences and CRN-TV.In January of 2007, CMP Launched CRNtech, a monthly publication focused on technology for the channel, with a mailed audience of 70,000 qualified readers. Frank was instrumental in the development and design of CRNTech and was the editorial director of the publication as well as its primary contributor. He also maintained the edit calendar, and hosted quarterly CRNTech Live events.In June 2007, Frank was named Senior Technology Analyst and became responsible for the technical focus and edit calendars of all the Channel Group's publications, including CRN, CRNTech, and VARBusiness, along with the Channel Group's specialized publications Solutions Inc., Government VAR, TechBuilder and various custom publications. Frank joined Ziff Davis Enterprise in September of 2007 and focuses on creating editorial content geared towards the purveyors of Information Technology products and services. Frank writes comparative reviews, channel analysis pieces and participates in many of Ziff Davis Enterprise's tradeshows and webinars. He has received several awards for his writing and editing, including back to back best review of the year awards, and a president's award for CRN-TV. Frank speaks at many industry conferences, is a contributor to several IT Books, holds several records for online hits and has several industry certifications, including Novell's CNE, Microsoft's MCP.Frank can be reached at frank.ohlhorst@ziffdavisenterprise.com

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