Small Business Market Has Changed

Over the last decade, important segments of the small business market have changed in ways that seem to make them better candidates for managed or hosted services. Specificially, some smaller businesses now are both "tech savvy" and "mobile focused," said Tim Harmon, Forrester (News - Alert) Research analyst.

In fact, some small businesses, especially those lead by younger entrepreneurs, are more likely to want mobile solutions than cloud-based solutions. The challenge is partly figuring out how to deliver greater value in the "mobile" space, beyond the obvious demand for smartphones, tablets and mobile broadband dongles, all of which a small business can easily buy directly from the established carrier retail stores.

At the same time, developments in software architecture seem to be moving in a direction, namely "cloud based" software and apps that are ideally suited both to managed services and mobile delivery. In fact, a recent CDW (News - Alert) survey found that 21 percent of small businesses already have adopted at least one cloud-based service. That might suggest a focus on smartphone, tablet and notebook applications that employees can use on a highly distributed basis.

That doesn't generally mean the small business owners and managers have embraced an explicit cloud computing approach, but that they evaluate individual solutions, and often find a cloud approach the best combination of value and price.

It is conceivable those twin developments will enable different sales strategies and lead product offers by some companies that sell products and services to smaller businesses, and some of their channel partners.

Consider that the lead offer for many telecom sales organizations is "business voice and broadband Internet access." The lead offer for many value-added resellers involves some element of the premises data network and computing infrastructure. The lead offer for a business software company might be a solution for one or more business process activities, ranging from human resources to accounting or customer relationship management.

The lead offer for a business equipment supplier might involve document management or point of sale and banking terminals.

One of the possible new niches within the broad small and medium-sized business market is the "tech savvy" SMB, or even the "mobile-focused" SMB. Think of it as a "horizontal" segmentation of the market that crosses traditional industry verticals.

A tech savvy SMB lead offer might be based on mobile or application services. That might mean leading with an easy-to-understand suite of customer-facing applications (marketing, for example), supported by mobile integration, and only incidentally including the broadband and voice support.

Granted, that might be an easier approach for an "application centric" integrator or value added reseller, but it is probably fair to say no existing small business channel has deep and rich experience in selling in this way, with the possible exception of firms that historically have focused on managed business software solutions. That should mean an opportunity for sales share to shift within the small business market, from existing channels to new channels that directly address tech-savvy and mobile oriented organizations.