Small Solution Providers Buoyant About 2008

By Lawrence Walsh  |  Print this article Print


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A survey reveals an SMB demand for new technologies and services seen as recession-proof opportunities for the channel.

Solution providers are shrugging off the economic woes caused by the subprime mortgage crisis and rising energy costs, saying that they're optimistic about the coming year and looking to expand their investments, according to the Computing Technology Industry Association.

According to a survey of more than 700 resellers with fewer than 1,000 employees conducted by CompTIA, 45 percent of the respondents expect their business to grow by 10 percent or more over the next 12 months and one-fifth anticipate growth of 20 percent or better.

CompTIA released the survey results this week at its annual SMB Summit in Bonita Springs, Fla. Conference attendees are already seeing rapid growth among small business end users—or companies that have less than 100 employees.

"Small businesses are trying to get the most out of IT and looking to their trusted advisors on where to invest," said Mitch Miller, president, Dynamic Computer Solutions of Topeka, Kan.

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Small businesses are discovering that they have many of the same needs as their midmarket and enterprise counterparts, according to the survey. The technologies that solution providers anticipate the highest demand for in 2008 reflect that trend. They are:

  • Secure data backup: 29 percent
  • Storage and disaster recovery: 24 percent
  • IP telephony: 19 percent
  • Server virtualization: 18 percent
  • Wireless: 13 percent
  • Storage area networks: 13 percent

"These are all solutions that allow an organization to get the most out of its technology infrastructure investment," said John Venator, president and CEO of CompTIA. "This is an important shift. Historically, SMBs tended to replace technology reactively when something went wrong. Now they are proactively looking for solutions that enable them to leverage their networks and boost productivity and efficiency."

SMBs investing in new technology and services means solution providers will need to expand to meet the growing demand. The CompTIA survey found that nine out of 10 solution providers are planning to hire new staff and one-third said they will add at least one new location to meet the demand from small businesses.

While new technologies such as IP telephony and virtualization will increase product sales, solution providers at the SMB Summit said managed services is where they see the greatest potential for revenue and profit growth.

"Services have always been the focus," said Todd Moran, director of client development at Computer Age, a small solution provider in Tampa, Fla. "Twenty years ago we gave away the service and sold the products. Today we can't do that because the margins are gone in products."

Lawrence Walsh Lawrence Walsh is editor of Baseline magazine, overseeing print and online editorial content and the strategic direction of the publication. He is also a regular columnist for Ziff Davis Enterprise's Channel Insider. Mr. Walsh is well versed in IT technology and issues, and he is an expert in IT security technologies and policies, managed services, business intelligence software and IT reseller channels. An award-winning journalist, Mr. Walsh has served as editor of CMP Technology's VARBusiness and GovernmentVAR magazines, and TechTarget's Information Security magazine. He has written hundreds of articles, analyses and commentaries on the development of reseller businesses, the IT marketplace and managed services, as well as information security policy, strategy and technology. Prior to his magazine career, Mr. Walsh was a newspaper editor and reporter, having held editorial positions at the Boston Globe, MetroWest Daily News, Brockton Enterprise and Community Newspaper Company.

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