SMB: It’s Good to Be the Little Guy

A Google News search the other day on “SMB” produced 1,807 returns. It’s not exactly “American Idol” numbers, but that’s a lot of news on small and midsize businesses.

What’s going on? Vendors in the past couple of years have made strong strategic plays for that market space, and lately the trend seems to have really intensified.

Earlier this month, products and services for SMB customers took center stage during a lot of the presentations and conversations at Cisco Systems’ Partner Summit in Las Vegas. Since then, the number of vendors announcing SMB-focused initiatives has multiplied at a steady rate.

Symantec, for one, launched an on-demand backup and recovery service for SMB customers. Meanwhile, Linux vendor Xandros announced a deal with Office Depot to get better traction in that market space. Nortel launched an SMB services and technology initiative around its converged voice and data platforms.

And solution provider Yellow Dog Consulting, of Vancouver, British Columbia, talked about plans to pitch to SMB customers its open-source wireless ERP (enterprise resource planning) application, developed on the backbone of vendor OpenMFG’s technology.

Why so much focus on SMB? It’s where the money is.

The enterprise market reached saturation a few years back for a lot of the technology that is filtering down to smaller companies. Pitching ERP or Linux applications, or even remote backup and recovery, to those customers was unheard of not long ago. SMB-focused applications didn’t exist in many of these areas of technology.

But as the enterprise has slowed down its IT spending and technology has become an intrinsic component of doing business in the SMB market, the number of SMB-focused products and services has multiplied manifold.

Businesses with one to 99 employees, for instance, are spending a combined $1.9 billion this year on wired and wireless switching, routing and networking products, according to New York-based research company AMI Partners. That would amount to a 13 percent jump in spending from last year.

AMI further predicts that SMB spending on storage and security technology will grow 19 percent this year, and companies in that space are looking more and more to SAAS (software as a service) as an option for these and other technologies.

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Hewlett-Packard and IBM have taken notice, and both vendors have recently launched SMB-targeted storage initiatives.

This intense focus on SMB creates the risk of overkill. In their determination to push technology and make their quarterly numbers, vendors have been known to shove too much product into the channel.

Of course, channel partners as a whole have become wiser about their vendor commitments and how they sell technology to customers. The idea of being a “trusted advisor” to customers is no longer just hot air. Solution providers today are much better attuned to the needs of their customers and how technology fits into that picture.

And the customer typically cares little about brands or the technology itself; as long as the equipment and applications help accomplish business goals, that’s all the customer cares about.

So while vendors are tripping over themselves to launch services and products for the SMB customer, they had better make damn sure those offerings are a good fit. Too often in the past, they weren’t. Budgets are tight, and the solution provider is going to stick with the tried-and-true technologies that satisfy the customer.

Pedro Pereira is editor of eWEEK Strategic Partner and a contributing editor for The Channel Insider. He can be reached at ppereira@ziffdavis.com.