The SMB scramble continues in Vendorland

Two online stories jumped out at me this week. Both were involving one of the IT industry’s biggest players citing a focus on the lucrative SMB space.

The stories in question - IBM Australia to intensify SMB penetration during 2008 (www.techpartner.news/?102790) and Case study: Microsoft’s SMB focus (www.techpartner.news/?102646), both have similar themes to a CRN online story from earlier this year: Cisco Australia increases SMB focus, hits 50 partners (www.techpartner.news/?100979).

In short, major vendors unveiling their focus on the SMB market is becoming a reoccurring theme in channel news. In case you needed a few more recent examples, check out: Netgear signs up Dicker Data for SMB offensive (www.techpartner.news/?95657), McAfee’s new SMB channel program (www.techpartner.news/?90676), Oracle’s big SMB stand (www.techpartner.news/?86302), Intel preps ‘clear bay’ SMB server platform (www.techpartner.news/?80210), SAP builds up all-in-one platform for SMB partners (www.techpartner.news/?71385). Look, you get the idea.

All these vendors want a market perception that they are SMB friendly. That they are tailoring their offering for the needs of the SMB and they are sculpting partner programs for the SMB savvy reseller.

The Microsoft Small Business Specialist program is in its third year of implementation, with 7000 partners internationally (450 in Australia). Analyst firm Gartner predicts that 2008 will see a rise in IT spending by SMBs, creating new opportunities for resellers in this market.

Inese Kingsmill, SMB director at Microsoft Australia, said: “We are growing our Small Business Specialist community and building value. There is huge opportunity in Australia for small businesses.”

Cisco already have a dedicated SMB division in Linksys, but have been applying huge focus to the lower end of the market, as noted in the online story from earlier in the year.

All this vendor focus on the SMB market could be seen as great news for the channel. The SMB market is the channel’s bread and butter. Vendors acknowledge that if they want a slice of the lucrative SMB pie, they need resellers.

This is all great in principle. Vendors are creating tailored SMB programs and solutions which the channel can provide with their healthy marketing support and rebates. I’m not one of life’s pessimists, but I have a concern around market saturation from an over congested channel. The SMB market is huge with numerous opportunities (99.8 percent of all Australian businesses are SMBs, according to IDC), but that’s not to say you still can’t recruit too many chefs to cook the SMB soup.

We all know what happens when too many resellers tender for a deal. Prices are slashed to seal the deal and the winning reseller is left with a margin thinner than Posh Spice on Atkins. Vendors need to be careful when recruiting, and resellers need to separate themselves from the pack. Offering additional services and value-add is the obvious advice to give an SMB resellers and as time progresses and vendor’s channel communities swell, that ethos will be more imperative than ever before.

continues in scramble smb strategy the vendorland