SMBs Get Big Attention from IT Industry

If William Shakespeare were alive today and working as a business or technology journalist, he might feel compelled to pen the following: “Whats in a small or a midsize business? That which we call an SMB by any other name would smell as sweet.”

By the same token, if Gertrude Stein had a tech blog, she might write: “An SMB is an SMB is an SMB.” They are all the same but different.

Small and midsize businesses have always been there.

In fact, they have long formed the backbone of our economy.

The numbers vary, depending on who is doing the measuring, but those businesses classified as SMBs invariably outnumber “large” enterprises many times over.

Research company IDC, for instance, presented figures at its Directions conference this month that show there are more than 40 million small (fewer than 100 employees) and home-office businesses in the United States, compared with about 8,000 companies that employ more than 1,000.

Despite overwhelming numbers, it seems the IT industry is just waking up to the SMB market.

Its about time.

Even though the largest enterprises spend more than SMB companies on technology, SMBs still spend plenty.

Also significant, according to IDC, is that SMBs are more consistent when it comes to purchasing technology.

SMB tech spending has grown every year since 2001, while overall tech spending—led by large companies—slumped badly in 2001 and 2002 and is still recovering.

Its no coincidence that we are now seeing more products targeted at the SMB market than ever before.

For example, eWEEK Labs, in the last month, has produced several comprehensive reviews of new products tailored to SMB needs.

The Labs reviewed Hewlett-Packards Small Business SAN Kit, which brings storage area networks to SMBs.

/zimages/3/28571.gifClick hereto read the Labs review of HPs Small Business SAN Kit.

Wireless networking deployments are also reaching into every corner of the business world, from home offices to large enterprises.

Consequently, the Labs reviewed new wireless LAN switches with extra security features that wont break the budget, from vendors Symbol and Trapeze.

/zimages/3/28571.gifTo read the Labs review of Trapeze Networks MXR-2 Mobility Exchange,click here.

The wealth of products and solutions now filling the SMB gap presents opportunities for small and large businesses alike.

To determine whether these new products might be right for your organization, you must ask: “What kind of business is my company?” The answer may not be obvious.

Next Page: Different definitions.

Different definitions

Getting back to the IDC research, how your company defines small and midsize is likely different from how vendors do.

For instance, IBM and HP both qualify SMBs at fewer than 1,000 employees, with the “small” subcategory as those with 1 to 100 employees.

To me, 1,000 employees is a lot of people and connotes “large” needs.

How many of you are working in a company of that size and consider it small?

Dell, which has mastered the art of segmenting markets, breaks it down even more, with companies fitting into fewer than 50, 50 to 99, 100 to 499, and 500 to 3,499 employees.

At Dell, 3,500 or more is considered large.

If you are an EMC customer, you are defined not by number of employees but by size of revenue.

SMB is less than $100 million, commercial is $100 million to $1 billion and enterprise is more than $1 billion.

With so many ways to define customer categories, can each of the vendors products match the needs of the businesses at which they are targeted?

Are the requirements of a $1 million company the same as those of a $90 million company?

Do 500 employees have the same needs as 3,499 employees?

Are IT managers paying enough attention to matching needs to products?

Theres a danger that small businesses may buy too much technology without realizing it.

They may not see a tailored, solution-specific version because their vendors consider companies of a certain size to be large rather than small.

Large enterprises may also be better served by “buying small”—looking to SMB types of hardware and software solutions for certain corporate departments.

To make sure vendors and customers win, both must be brutally honest about IT needs in question.

Vendors must stay flexible and adapt to the ever-changing SMB market. Technology buyers must conduct better due diligence to find the solution that best fits their business, be it a “large” company of 500 or a “small” $100 million company.

eWEEK Editor Scot Petersen can be reached at scot_petersen@ziffdavis.com.

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