Big technology players are beginning to realize that small is beautiful. Many are now actively courting small and medium businesses (SMBs), offering packages ranging from leasing of equipment to installment-payment schemes. These will no doubt benefit the end users most.

“The interesting thing happening in the IT market is that big IT players are realizing there’s a large SMB market,” observed Venu Reddy, research manager, IT services, with IDC Asia-Pacific. “We’re talking about thousands of companies, and some serious money will be spent. They (vendors) have ignored this for different reasons—they wanted critical mass, a few big deals.”

But now, said Reddy, “they want to expand their revenue portfolio and diversity”.

To address the SMB market, big vendors are putting together bundles of hardware, software and services, and marketing them as solutions. “Nothing customized or fancy,” noted Reddy. “Just something that a wide range of SMBs can use.”

According to him, these plain-vanilla solutions should appeal to SMBs as IT implementations can be costly.

“Very simple packages are be relatively expensive for SMBs,” said Reddy. “That’s where the financial schemes come in. [If] you can’t afford $100,000, you can pay by installments, with very little upfront—between 5 percent and 10 percent.”

One company that is making technology more affordable for SMBs is HP. The vendor is offering Smart Finance Service, a suite of lifecycle financial solutions that gives SMBs end-to-end support in accessing and managing their IT investment.

“The financial solutions have been tailored to ensure SMBs get more for their IT investment than if they paid cash and even triple the solution size that their budget would ordinarily be able to support,” said Anthony O’Connor, sales director of HP Financial Services.

SMBs can lease their equipment from HP, which will also look after support issues such as maintenance and upgrades. The company even has an Aladdin-like scheme whereby it carts away a customer’s old equipment in exchange for new.

"HP understands the cost of removing equipment can sometimes be quite hefty for an SMB to bear, so our acquire-to-retire asset management services help SMBs manage their investment cost-effectively."

“HP understands the cost of removing equipment can sometimes be quite hefty for an SMB to bear, so our acquire-to-retire asset management services help SMBs manage their investment cost-effectively,” said O’Connor. “This is one way to ensure that IT equipment is always up-to-date.”

Another way in which big vendors reach out to SMBs is by channeling, or going into partnerships with smaller companies to come up with packages. Sun has a channeling programme, and IBM has got together with Intel, Linksys and Azure Technologies to offer the X-Packs solution, which comes in three-, eight- or 20-user bundles, and can be customized.

Explaining the rationale for this strategy, IDC’s Reddy said: “The contracts they go after are large. "Since it is not as lucrative to use the same salesforce to sell to the small guys, they (vendors) use channeling," he added. Payment mode is similar: SMBs have options like leasing equipment, installment payments, and loans.

Read the fine print
Before deciding on the IT solution, Reddy said, SMBs should consider issues like scalability. “A company may expand from 50 to 100 people. Does the solution have a ramp-up possibility, or does the scheme stop at 50?” highlighted Reddy.

There is also the question of interoperability. It is always prudent to find out how the software that you already have will work with the new piece, added Reddy.

As with all other investments, IT decisions would have to be made with due diligence, especially when it is an ongoing effort. “This is not a one-time thing. This is sort of going to be a continued reality. It’s going to continue for a while at least, if not forever," said the IDC analyst.

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