Magazine Article | March 19, 2014

Why VARs Should Set Their Sights On SMBs

Request Information

By Mike Monocello, editor-in-chief, Business Solutions magazine
Follow Me On Twitter @monocello

The SMB market is huge, technology has never been better, and budgets are there for the taking.

If you cater to the SMB market, make sure you’re selling the following technologies. Why? The market is ripe (a study by analyst group Gartner reveals that the SMB market is projected to surpass the $1 trillion mark in IT spending by 2015, representing 44 percent of total IT spend worldwide), and the price and capabilities of the technologies are right. Bob Stegner, senior VP of marketing, North America, for SYNNEX Corp., says that the current health of the SMB market from a potential IT spend perspective is very strong. “The IDC estimates that spending will reach all tech categories, with telecommunications equipment, packaged software, and IT services seeing the greatest growth in 2014,” he says. “The ‘S’ in SMB will grow 69 percent Q1 2014 over Q1 2013. Overall, the IDC estimates that SMB IT spending will increase 5.1 percent over 2013, reaching $560 billion.” Again, everything’s right for big sales.

Consider IP video surveillance. If your first reaction is to roll your eyes thinking that IP is too expensive, you’re wrong. “While IP video has won for years in large surveillance installations because of image quality, scalability, functionality, and total cost of ownership scale, analog still held a stronghold on the SMB market because of perceived cost and complexity advantages,” explains Fredrik Nilsson, GM for Axis Communications. “That’s changing, thanks to new IP technologies and ever-dropping costs.” However, he goes on to say that integrators need to understand this market and the new IP technologies (such as edge storage, hosted video, video encoders, and even free software) to be successful. If you’re not wise to these technologies and what they can do, you’re missing a big opportunity. “With millions of small businesses across the country accounting for more than half of all U.S. sales, that’s a lot of opportunity for integrators to convert old, low-quality analog DVR systems to IP sales.”Subscribe to Business Solutions magazine

Also, the cloud continues to be getting a lot of attention in the SMB space. “As the IT industry continues to see widespread adoption of cloud and mobility, these trends will permeate the SMB space more than ever before during the next year,” says Stegner. He says that, according to the IDC, cloud adoption will continue to climb, with one-third of U.S. SMBs and three-fourths of U.S. midsize businesses using cloud in some fashion by the end of the year. The IDC also says 2014 will be the year to “step up or give up” for SMB channel partners concerning cloud solutions.

Then, of course, there is the mobile trend. Stegner says mobility will be more tightly integrated into SMB environments as firms “bake in” rather than “add on” to achieve performance improvements, according to the IDC. “Overall, mobility will be a top priority as SMB mobile app use continues to soar to new heights,” he says, while adding that the SMB market will demand a services-led business model, as opposed to one that is more product-focused.

One of the biggest areas SMBs need help is with network security for malware. Tim Gillen, president of Terrapin Networks and ASCII Group Member, says that solutions providers should provide SMBs with services like education, constant network monitoring and checkups, and 24/7 support. In the event things go wrong, providing proactive monitoring, backup, and recovery services can keep customers up and running while providing solutions providers a source of recurring revenue.

There are also less glamorous sales opportunities available. Dylan Schafer, channel sales manager for Wasp Barcode Technologies, says that 64 percent of businesses conduct manual searches for assets every day. And each of those searches takes approximately 30 minutes or longer to locate an item. Lost items equal lost revenue, so he recommends selling asset tracking solutions involving bar codes, labels, and/ or RFID. “Organizations that manage their assets properly will achieve 20 percent in cost savings per managed asset in just nine months,” he adds.

In an article earlier this year, editor Jay McCall said the following of the SMB market: “SMBs have many of the same IT needs as enterprises, but smaller budgets. SMBs lack internal IT resources. SMBs prefer simple.” Take those points into consideration when bundling any of the above technologies, and you’ll be well on your way to earning your piece of the $1 trillion pool.

Newsletter Signup
Get the latest channel trends, news, and insights