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Small- to medium-sized businesses (SMBs) are important customers for virtually every information technology (IT) vendor, and with good reason. While Wall Street and the major financial markets avidly follow the exploits of large enterprises, smaller businesses represent the entrepreneurial engine of the U.S. economy. According to the U.S. Small Business Administration (SBA), small businesses represent 99.7 percent of all employer firms, employ half of all private-sector employees, and generated 60 to 80 percent of net new jobs annually over the last decade. Small companies also drive business and technical innovation, producing 13 to 14 times more patents per employee than large patenting firms and employing 41 percent of high-tech workers including scientists, engineers, and computer technicians.
Given the sheer diversity and widely varying levels of expertise among IT small businesses, considering them a unified class is a dangerous oversimplification. But that is precisely what many in the technology industry do. Spend time reviewing vendors’ small business’ IT solutions, and you will typically find a homogeneous array of simplistic products. In reality, SMBs suffer many of the same IT ills as larger organizations. They must contend with rapidly expanding complexity, shrinking budgets, and the need to make every IT dollar count. Yes, small firms with limited technical experience need entry-level products, but vital, sophisticated SMBs require innovative computing solutions to get ahead and stay ahead of the game. IBM’s new BladeCenter S (BladeCenter S) is one such technology, tailoring the company’s battle-tested blade server architecture with new features and options designed to help meet the specific critical business and technical needs of smaller companies.
Modern Small Businesses – The only rule is no rules
In considering the SMB sector, the immediate issue that jumps to mind is how ludicrously limited the “sector” concept is for such a diverse environment. Traditional notions of small business rest almost entirely on size; either of a company’s number of employees or its annual revenues. Using common “old math” measurements, companies with roughly 1 to 99 employees or $100,000 to $10 million in annual revenues qualified as small businesses. But how accurate is this?
Not very. Size does matter to a degree, though some models, which peg small businesses as having roughly 26-200 employees and $5-$50 million in annual revenues, offer more accurate insights on modern small-business behavior. But that does not tell the whole SMB story. Small businesses inhabit and compete in virtually every industry and global region, and share most of the same inherent challenges and enjoy most of the same potential opportunities as larger organizations in those markets. In essence, a small retail player typically has far more in common with larger retail companies than it does with small businesses in other industries.
This point also extends to IT issues, where applications and business processes offer a better measure of a smaller organization’s IT requirements and capabilities than does the scope of its efforts. That being the case, are there any IT-related points of commonality that most SMBs share? Actually, yes. Small companies of every size employ IT solutions to enhance processes and increase competitive advantage. In addition, most small businesses utilize inexpensive, x86-based PCs and servers, as well as direct attached (DAS) and network attached storage (NAS) systems.
The continuing evolution of industry-standard IT solutions means that small businesses have access to better, more powerful technologies than ever before, but they also face numerous challenges related to these investments. The biggest technology problem for small companies is one of habit; the tendency to purchase and deploy tactical IT solutions individually rather than with an eye on longer-term strategic goals and results. This “organic accumulation” approach tends to fuel overall IT complexity, driving up longer-term management and maintenance costs and lowering overall return on investment (ROI). In time, as a company’s use of technology matures, it is more likely to recognize the value strategic IT deployment offers over organic accumulation.
In addition, while the increasing capabilities of technology products deliver better hardware and software performance, they also expand the overlap between smaller and larger organizations’ IT usage.
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