Selling to SMBs makes virtualization, cloud cheaper, simpler, more available

Redesigning high-end systems for low-end environments makes both better

Much of the IT industry seems to be reorienting from the big companies that are its bread-and-butter most of the time to small- and mid-sized companies to which it usually caters only when sales are so slow it has no other choice.

The economy's growing again, though, and IT budgets at big companies are growing – at least according to most analyst reports.

Big vendor companies are going after small user companies not as a way to boost a stubbornly short list of sales prospects; they're doing it because small- and mid-sized companies are – unusually – buying sophisticated IT systems at almost the same rate as big companies.

Well, not buying, really. Renting.

Forty-four percent of small- and mid-sized companies already use at least one SAAS or cloud-based system and 70 percent plan to add more during 2011, according to a survey of 1,000 SMBs carried out in December by market researchers MarketBridge. Marketing and sales-related apps are the leading business apps; security is tops among cloud services.

They're not buying for the normal reason – to get top-flight IT without paying to build and host it.

The largest group – 38 percent – are using the cloud to support workforces that are more mobile than they can handle on their own, and to accommodate growth. The earliest adopters are growing at more than 10 percent per year.

More than half – 52 percent -- prefer to deploy some virtualized apps on private clouds, rather than public.

That just makes things tougher for IT vendors trying to target them. Not only do companies like Microsoft, Oracle, HP, IBM, Citrix and VMware have to build versions of their products easily accessible via Web browser and hostable on someone else's infrastructure, they have to build versions able to be virtualized, abstracted and granularly managed at comparatively low cost, with a low requirement for on-premise support.

The public-cloud requirement has thrown Microsoft into a quietly intense struggle with its own resellers for more than two years, as it tries to expand its core Windows and Office franchises to include the online versions Azure and Office365.

It threw VMware for a loop, when Citrix and Microsoft started making unexpected gains in the virtualization market selling to smaller-than-enterprise customers.

Virtualization and cloud vendors, especially, seem to be splashing as quickly as possible toward the shallow end of the pool. VMware is pushing not only SMB versions of its own products, but also management and SMB-oriented clouds, with its acquisition of Shavlik Technologies.

Intel wants to sell a new cloud platform to SMBs.

Citrix bought virtual-desktop-in-a-box vendor Kaviza this month, and plans announcements of a series of new products later today designed to appeal to SMBs.

The good thing about making vendors build for smaller businesses is that advanced technology filters both ways. The high-end stuff gets cheaper and easier to use when developers have to package it for smaller customers.

The high-end packages get easier to maintain and require less support because it's usually easy and cost effective to add scripts and automation built for SMBs to enterprise products originally designed with the assumption teams of sweating, shirtless techs would be available to carry the hardware (and vendor sales-techs) around in sedan chairs until they found the most perfectly luxurious spot for each.

The only questions for customers may end up being where you draw the line between S M and E(nterprise), and whether there is a good reason to want there to be one.

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