The Big Deal: Tech Giants Fawn over Small Fry

By Stan Gibson  |  Posted 06-05-2006 Print Email
With the high-end enterprise market growing at a snail's pace and big vendors desperate for new revenue, industry heavyweights are turning their attention to SMBs.

Tom Miller is a wanted man. He's wanted by Microsoft and a handful of other top technology vendors willing to go to unusual lengths to get his business, even though his company might look like small potatoes to some.

"The enterprise market is saturated. Vendors have woken up to say, 'Here is a market that has similar needs to the big enterprises,'" said Miller, senior IT director at FoxHollow Technologies, a medical technology company in Redwood City, Calif., and an eWEEK Corporate Partner.

A publicly traded company, FoxHollow has about 550 employees, including an IT staff of 17, and reported $128 million in revenue for 2005.

"Normally a company our size doesn't get an assigned relationship manager, but Microsoft has given us one. It doesn't mean we have gotten anything extraordinary, but at least the attention span is there," said Miller.

With the high-end enterprise market growing at a snail's pace and big vendors desperate for new revenue, industry heavyweights such as IBM, Oracle, EMC and Microsoft have been turning their attention to small-enterprise customers in recent weeks.

IBM leads with a plethora of initiatives, ranging from a Concierge Service for smaller customers to a small mainframe, a downsized blade and storage bundles.

IBM also is trying to modularize its service offerings as commodities for smaller customers.

Oracle is considering a small-enterprise version of its Fusion middleware to complement its Oracle Database 10g SE (Standard Edition) One and E-Business Suite Special Edition, both tailored for small customers.

EMC has been making waves by launching with Dell new Clariion systems for small enterprises, while SAP announced with IBM an expansion of their reseller relationship aimed at small enterprises.

These efforts are redefining the enterprise market. Research company IDC estimates the global small-enterprise market to be worth $475 billion annually.

Big vendors typically haven't dealt directly with customers that have fewer than 1,000 employees, relegating them to channel partners. But the lines are blurring, as the case of FoxHollow proves.

Click here to read more about the challenges tech giants face.

The flurry of attention means that, for small-enterprise customers, life is—or should be—good.

With tight budgets and small staffs, small enterprises can't waste time on complex products that require the consultant hand-holding typical of full-blown enterprise products. Further, they must beware of complex products relabeled and pitched for small enterprises.

"I don't believe all the hype. IBM says they have a product for the small market. A whole lot of times, it's the same product but priced differently," said Mike Chandler, CIO of Wilmington Trust, in Wilmington, Del., a financial institution with $10 billion in assets.

For all but specialized banking software, Chandler said he wants products that work out of the box, which is generally not the case for high-end enterprise products.

For instance, Chandler said he looked at an EMC Documentum imaging system that the vendor was pitching him. "They tried to sell this as a midmarket-to-small-market product. The packaging and pricing was slightly different, but otherwise it was just the same as a mainstream enterprise product we saw two years ago," said Chandler, adding that the product had not been simplified for small enterprises.



 

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