Can companies make money selling to the Small and Medium Enterprises (SMEs) in Emerging Markets? Do the Enterprise Hardware and Software solutions provide the platform to build a large, successful company? What is the business model in selling to SMEs? How do you reach SMEs?
By SMEs, I mean those companies outside the Global 5-10,000 biggest companies. These large companies will be targeted by all the world’s big software and b2b players. That still leaves 25+ million SMEs in the world. SMEs are defined as companies with 1-500 people, or companies with upto USD 50 million in revenue. There are estimated to be 8 million such SMEs in the US, and another 8 million in Europe, with a similar figure in Asia. My guess is that in Asia the number of SMEs will probably be much larger as a percentage of the companies.
There are lots of these smaller and medium companies who all are faced with one big challenge: Survivial. They need to compete and live. Yes, they are hard to reach, especially the ones in the emerging markets. No one really cares about these companies in these countries. At the same time, SMEs in Emerging Markets are also aspirational.
Many of them are exporters, and part of global supply chains. Adoption of effective technology is very important for their business. Just buying a PC and a Net connection is not the answer – what they need is a “whole solution” which is what we are putting forth / postulating here.
The solutions which are good for the “developed” market will not necessarily work for the emerging markets. One has to rethink how the technology infrastructure (software, hardware and services) can be provided but at a fraction of the price. What is proposed here is exactly that – a “whole solution” comprising of the Enterprise Server, Enterprise Client, shareable monitors, and the Enterprise Software stack. One needs to go in with a “whole product” to target these enterprises. The message: Do you want to be an “eBusiness winner” (or even a survivor in tomorrow’s world). If so, we have the technology and services mix for you.
SMEs are also the hardest market to reach and that is why few have succeeded in targeting them. The margin on each sale is low. The problem needs to be treated like an FMCG product selling. A distribution pipeline, which can be fed with incremental products and services for the SMEs, is needed.