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SMBs attract enterprise players

Jun 30, 20033 mins
Cisco SystemsIBMMicrosoft

Watch your wallet when the big guys come calling

Ever get the feeling you’re being watched? That’s because smaller businesses are sitting squarely in the cross hairs of giant companies trying to “help” them. My advice? Take cover.

Microsoft recently referred to small businesses as firms up to 1,000 employees. When I started installing networks in the mid-1980s, a huge network included 300 users. Inflation may be powerful, but 1,000 people will never be a small business.

In early June, IBM and SAP launched a new small business partnership targeting companies with 10 or more users. But it also touts global reach and support for offices in 20 different companies — that’s not small business. SAP doesn’t list pricing or system requirements on its Web site, which reminds me of the old joke: If you have to ask, you can’t afford it. I called the Dallas SAP sales office pretending to be a customer, but as yet no one’s returned my call.

For Big Blue’s part, it has ported the SAP Business One system for small businesses to its new DB2 Express software. That’s right, the IBM mainframe database can now be yours for an entry price of $500. IBM positions DB2 Express as a mid-market product for firms with 100 to 1,000 employees. The server (Windows or Linux) costs $500, but each user costs an additional $100. Expect to see mid-market software applications ride the lower-priced DB2 down to small businesses, too.

Cisco pitched its brand to small businesses in early June, too. The company’s been buying its way into the SMB market for years, most recently by acquiring Linksys. And Cisco makes a creditable pitch: Its Business Solutions Networking Roadmap breaks down its “network blueprints” for three company sizes: 1 to 99 users, 100 to 500 users, and 501 and up — an approach that acknowledges different size networks have different needs. Imagine that.

Telephone companies are chasing SMBs now, too. Verizon recently announced reduced prices for bundled T-1 services. What didn’t it announce? The cost of equipment. It’s calling the service a “T-1” (1.5M bit/sec) when the offer is for fractional T-1channels bundled together. It did put the two-year service commitment in small print, though.

Covad puts pricing for its full and fractional T-1 services on its Web site, and includes the cost of equipment. But like Verizon, Covad demands a two-year contract in return for the best price. But do you want to lock yourself into a 24-month contract when telecom prices are dropping? I don’t.

Keep in mind: Dealers and VARs pursued by big vendors get great deals (some products free, some at great discounts) during new program rollouts. Will your local supplier sign up with Cisco, IBM or SAP? You bet. Will it change its business model to accommodate the big vendors? Probably not, but the big guys are looking for new ways to get in front of small business customers, so everyone (supposedly) wins.

Just make sure when your sales rep comes knocking, he focuses on your needs. Make him prove how the “cool new product line” helps you solve a problem, save time or save money.

The urge to attack the SMB market comes and goes for the big industry players, so grab anything you need while they’re chasing you. But remember, your local technology partner will always be there, even when the big guys forget you — something that’s likely to happen when the big companies start buying again.