| Power Lunch and ... |
a Power Lunch*
and a feature story
- on you - in Backbone
and an iPhone or a BlackBerry
To enter...
Fill out a readership survey
(confidential)
*with Dave Chalk, technology expert and our editor, Peter Wolchak |
|
|
| Playing to the SMBs |
July 13, 2004 |
By Issie Rabinovitch
Small and medium businesses ( SMBs) often struggle with a very basic dilemma: they drive a great deal of Canada’s economic activity, yet they do so without the extensive IT budgets and tech expertise available to their larger competitors. That SMBs power the economy is evident. According to Statistics Canada, 95 per cent of all businesses in Canada employ fewer than 50 people, and SMBs remain the dominant force in Canadian labour markets. The most recent stats, from 1999, show that 55 per cent of Canadians worked for a small- or medium-sized business. Furthermore, employment is growing faster in this sector than in large enterprise. The federal government recently underlined this reality. Minister of Finance Ralph Goodale, in his budget speech on March 23, 2004, said: “Mr. Speaker, Canada’s small- and medium-sized businesses remain key engines of Canadian growth, taking risks, seizing opportunities, creating jobs.”
So it makes sense for technology vendors to pursue business opportunities in this space. In some cases, the growth opportunities for their products and services are approaching a saturation point in the large enterprise space, and in many cases the SMB segment may be an untapped market. But SMBs aren’t just smaller versions of bigger companies. They have requirements unique to their business segments along with limited budgets, even relative to the more reasonable fees of an outsourced vendor partner.
Given the significant business opportunity however, large vendors still want to play in these smaller arenas.
In March, HP Canada unveiled new SMB resources, services and products, and financing solutions as part of its ongoing Smart Office program. Smart Office was announced globally in September 2003 as part of a US$750 million initiative to help SMB customers get the most from their IT investments. HP also opened an SMB Expertise Centre in Canada to give HP customers and others access to professional and highly trained consultants familiar with the requirements of SMBs. These services were launched as no-charge offerings.
“It’s clear to us that access to consultative expertise is a top priority for small- and mid-sized businesses,” said Lloyd Bryant, vice-president, Personal Systems Group, at HP Canada. About six weeks after the Expertise Centre opened, Backbone phoned the company’s 1-800 number to try out this free service. It turned out the Expertise Centre was staffed by HP sales reps who wanted to help prospective customers choose the most appropriate HP products. When senior HP managers were asked about the gap between the promises made in March and the realities manifested in May, it emerged that call volumes in the days after the Expertise Centre opened were so great that the “free consulting” program had to be adjusted. HP hopes to realize its original goals for the Expertise Centre within a number of months, according to Ken Price, SMB marketing manager for HP Canada.
“We were overwhelmed by the initial response and call volume; the demand is clearly there. We’re fine-tuning our resources and expanding our menu of choices,” Price said.
HP’s experience illustrates a couple of facts. First, there is a tremendous pent-up demand for consulting services in the SMB space. Second, it is challenging for any company to find a solid way to address this need. Even HP, with its tremendous resources, is reworking its approach to find a model that will work.
Also in March, HP launched Smart Support, a suite of services and solutions configured specifically for small and medium businesses.
Some of the HP Smart Support services announced in March include: HP Learning Curve: online, single-source training for a range of hardware and software products from HP and other vendors. Customers receive 24/7 unlimited access to virtual IT specialists and other services for 12 months for $209. IT Professional Help Desk for SMBs: provides support for SMB customers with limited IT resources via access to a private Web site and other tools and guides. Customers receive support for five IT incidents over a 12-month period for $2,170.
If these and other HP services deliver high-quality support, their costs will not be a barrier to acceptance. Consider the costs associated with hiring a single well-qualified IT professional.
MID-SIZED BIG BLUE
IBM’s pedigree is in the enterprise but it is increasingly becoming interested in SMBs. Still, it is no surprise that many of its SMB offerings are intended more for medium than small businesses. IBM has developed diagnostic packages for HR, supply chain, financial and virtually every other functional area of a mid-sized company. A consultant arrives and runs through a checklist of tests and writes up a report. This is priced in advance, a feature that is very important to SMBs, who need predictable costs. IBM recognized that SMBs tend to shy away from consulting services because of a fear of the size of the final bill. Another fixed-price service is a Web assessment. An experienced consultant examines the user interface, the design of the site, and its interest and effectiveness. In addition to the use of standard checklists and benchmarks, the personal experience of the consultant plays a big part in the quality of the final report. IBM also consults on services offered by software giant SAP. These speed and simplify implementation of SAP’s Enterprise Resource Planning solutions, including SAP All-in-One for Fabrication and Assembly, SAP All-in-One for Wholesale Distribution, and ERP Optimization/Benefits Realization. It is the rare company with fewer than 500 employees that can manage a SAP implementation without experienced outside help. For many mid-sized companies, a Customer Relationship Management solution may be more timely than ERP. IBM has CRM Strategy Value Proposition, Blueprint and Roadmap Assessment as well as diagnostic products to assess solutions already in place. The offerings are based on studies IBM completed in 2003 when it conducted a CRM Done Right survey. In this U.S.-based study, IBM discovered that only 20 per cent of respondents felt they were fully succeeding in their CRM projects. IBM identified and prioritized the key steps of a successful project and showed that the percentage of companies achieving success could go up to 60 per cent if they completed these suggested steps.
Offerings such as IBM’s and HP’s play a valuable role in the SMB space, according to Ivar Kangur, a senior market analyst with Evans Research in Toronto. But again there are challenges for both. While there is a market for IBM’s SMB products, Kangur said the company needs to refine its marketing approach in order to better define the offering. His opinion of HP’s SMB products is that they are “on the right track” but he won’t have a detailed analysis until later this year, when his company has completed an SMB research project.
SMB FROM SMALLER SOURCES
SoftCom is a small Toronto-based company which offers Internet services to small and medium businesses. Its mandate, according to Tony Yustein, CEO, and Michael Carr, vice-president of sales and marketing, is to help companies without a lot of internal IT expertise deploy sophisticated technology more quickly and at a lower cost than would otherwise be possible. Founded in 1997, SoftCom’s services include application hosting, e-mail, collaboration and domain registration.
In April 2002 it became the world’s largest Microsoft-exclusive hosting company but two years later it voluntarily gave up that distinction to pursue a multi-platform strategy, and by April 2004 it was offering Linux services in addition to its Windows-based services on all of its hosting plans. Customers are able to choose the mixture of Windows and Linux services they need. If there’s a requirement to host SQL-based data, for example, customers can choose between a Windows-based or Linux-based server, depending on their requirements. Either way, using SoftCom’s servers to manage the data is cheaper than the do-it-yourself option, as customers don’t need to incur hardware, software and expertise costs.
SoftCom also provides Microsoft SharePoint services to 12 Canadian universities, small businesses and departments within larger companies. SharePoint enables collaboration within an organization and with partners and customers. Later this year, SoftCom also hopes to be the first non-telco to offer access to a Microsoft Exchange Server for e-mail and Outlook calendar sharing. Exchange Server has typically been a higher ticket item and out of reach for some smaller companies.
According to Yustein, this offering is likely to be as popular with families as with businesses. Families use Outlook for e-mail and calendaring and they want to share information without incurring the costs of running their own Exchange Server. And we cannot leave this discussion of IT services without mentioning EDS. The company, formerly owned by Ross Perot, is a global leader in outsourced and managed services. According to James Toccacelli, who handles public relations for Canada from his Toronto office, EDS “will not turn away any revenue” but he admitted its solutions were not aimed at small and medium businesses and were often inappropriate for such companies. Refreshing words.
|
|
|
| Top 300 Issue |
 
|
| Gadget of the Week (Canadian) |
|
Where did I put that darn headset?
Cardo S-800
Bluetooth headsets are very useful - until you misplace them. When you lose the attractive little S-800, you use your phone to signal the headset to start buzzing.
more>>
|
| Gadget of the Week (Japanese) |
Sounds of Japan
Why record just the visual when you can capture the sounds as well.
more>> |
| Backblog RSS feed |
Click to subscribe  |
|
sponsored by 
