Linux for the SMB market: slow? steady? or both?

Everywhere you turn nowadays, another company is targeting the Small and Medium Business (SMB) marketplace. SMBs are growing, and represent a segment of the IT market that has not been fully exploited by many, including open source software vendors that boasted early successes with large enterprises.

However, as vendors have learned, there have been obstacles to penetrating the SMB space. SMBs are reluctant to taking a chance on an open source solution in what has become a Microsoft market. They want IT solutions that are easy to install, configure, and maintain. The full penetration by open source software vendors is sluggish, but it's moving.

Nearly three years ago, AMI Partners researched the Linux penetration into the SMB marketplace. According to their research, Linux had penetrated about a fourth of all companies with 100 to 249 employees. The greatest concentration of Linux users was found in the businesses services industry. In fact, many SMBs who do use Linux and open source software are in the IT industry and already familiar with open source solutions and their configuration and maintenance. Resellers are integrating open source solutions into their offerings to the SMB marketplace accordingly.

The Huntsville, Alabama IT firm Avocent, a maker of managemnt products including KVM and serial console equipment, has continued to build a business strategy intended to capitalize on the SMB marketplace. They introduced a new Linux server management product developed specifically for the SMB market.

"Small businesses are looking to save money on technology," says Kamini Rupani, a product director with Avocent. "In a time of tightened licensing, escalating software costs, relative to total costs, and low initial costs of Linux and its cadre of tools, SMBs are looking at the strategy of considering open-source software. Linux is well suited for a smaller organization because it scales incrementally without large initial cash outlays. SMBs can tailor their enterprises to better fit their needs with Linux."

Rupani adds that other cost savings associated with open source include using Linux servers in a variety of roles such as file server and Web server. In addition, Linux servers can service a large number of users at no extra cost apart from the additional hardware.

Heather Boyer, director of product management for the Englewood, Colorado-based Verio, an Internet Protocol (IP) network provider, pegs the lure of Linux and open source solutions for the SMB marketplace to three factors: to reduce costs, get away from vendor lock-in, and improve security.

Microsoft is avidly pursuing the SMB market and Boyer’s point of getting "away from vendor lock-in" is something that the SMB would not mind at all.

"People are learning that sole-sourced, proprietary [software] is bad for their business long term. Not only will they be stuck paying higher prices over the lifetime of the product, in many cases the proprietary technology isn't suitable for directly solving the business problems they are facing," says Dave Roberts, VP of strategy for Vyatta, a supplier of a commercially supported, open-source router and firewall solution based on Linux. "Open source allows them to modify things and adapt the solution to their particular problem. In many cases, consultants and SMB business partners are helping them develop the systems they require using open source as the raw material."