TECH TALK: SMEs and Technology: Recent Developments (Part 2)

Continuing with some of the technology announcements related to recent small- and medium-sized enterprises (SMEs):

Long an underserved technology market in the past, SMBs (small and midsize businesses) are now seen as important revenue streams for major IT vendors. With the SMB market worth some $300 billion and growing at a significantly faster pace than Fortune 1000s, there are significant revenues to be garnered. In response the big vendors, including IBM, Microsoft, and Sun Microsystems, are retooling enterprise hardware and software offerings to meet SMB needs delivering low-cost platforms with simple, automated features that bring ease of use and low maintenance requirements. [InfoWorld, August 15]

In an effort to expand its services for small and medium-size businesses, Yahoo is introducing a Web site building tool that will be offered free to the company’s Web hosting customers. Yahoo SiteBuilder is just the latest effort by the Sunnyvale, Calif., company to woo smaller business users, which represent a cash cow for the Internet giant. Yahoo already offers business e-mail, domain registration, Web hosting, and e-commerce and marketing services for the sector. Additionally, the company announced last week that it was snapping up commercial search provider Overture to expand its paid listing services. The combination of these offerings are aimed at creating a one-stop shop for small and medium-sized business users to take care of their online needs, said Rich Riley, vice president and general manager of Yahoo’s Small Business group Yahoo reported earlier that its second-quarter revenue jumped 42 percent, partly thanks to the fee-based services it offers to small business users. [InfoWorld, July 21]

France is a good example of the potential for the software giants – there are around 2.9 million companies with less than 500 people in the country – but also the pitfalls. One indication of the potential is a segment like the accounting profession, where more than half of French SMBs have software providers whose share of the market is less than 1%, typically small companies themselves lacking the resources and domestic, let alone international, reach to give them a competitive edge. [Wall Street Journal, July 2]

IBM expanded its efforts to court medium-size businesses–that is, companies with between 100 and 1,000 employees–with its WebSphere software and Global Services offerings, which it generally reserves for larger businesses. Through its Express product development and marketing campaign, Big Blue will deliver a suite of applications, services and hardware designed, priced or packaged specifically for midsize businesses. [, June 25]

In an effort to bolster a stronger level of specificity for its SMB (small to midsize business) clientele, SAP unveiled a quintet of new mySAP All-in-One products this week geared directly toward industry-centric areas. Bringing the total amount of mySAP All-in-One software solutions to 20, Gary Fromer, vice president of SMB at Waldorf, Germany-based SAP, said that he expects that amount to double by the end of 2003. We have the opportunity to really use this, mostly outside of manufacturing, said Fromer. You will see us going into industries SAP maybe never has penetrated before. Fromer said smaller-size customers are in need of a best practices helping hand, due to lacking the deep pockets of larger companies and unable to afford the dollars or time to install and create a software system to supplant evolving market needs. [InfoWorld, March 6]

These are an indication of the increasing focus. Yet, most of the products and services being launched by the It companies are still too expensive for the SMEs in the emerging companies, which is where the next set of opportunities lie.

Tomorrow: Characteristics

TECH TALK SMEs and Technology+T

Published by

Rajesh Jain

An Entrepreneur based in Mumbai, India.