Kevin Hooper, director of SMB sales and business development for IBM Software, said it's a "challenge to reach customers with 100 to 1,000 employees. We need a robust ecosystem of solution providers, resellers, influencers, ISVs. It's a fairly gargantuan enablement program."
Over the past two years, IBM reports that through its Small and Medium Business Advantage program it has invested $500 million to win over SMBs by targeting specific functions within specific industries. More accurately, the investment is aimed at helping its partners reach small businesses. "ISVs are getting on the bandwagon," Hooper said.
Based on numbers released today by IBM, its partner-driven plan is working. From January 2004 to the end of June, IBM has landed 10,000 SMBs and 25 percent are Express customers, according to Hooper. In contrast, for the first half of 2003, IBM had about 5,000 SMB customers and less than 10 percent had implemented Express offerings, Hooper said.
"You might be asking, 'Why are only 25 percent of Express customers? What's going on with the rest?'," Hooper said. "Express opens the door to SMB customers." For the other 7,500 new customers, the complexity may go beyond the Express offerings, which focus on on-demand, scalable technology. So while many start out looking for an Express solution, some customers may end up needing more customized solution, he said.
Adding to the Portfolio
In a move to offer more companies ready-made services, IBM will announce on Tuesday the addition of six new industry templates to its Solutions Builder Express Portfolio, which Big Blue calls Starting Points. The new Starting Points include Collaborative Document Management in Banking, Item Management and Synchronization for UCCnet, Retail e-commerce Web site, Collaborative Community and Employee Portals for IBM eServer iSeries, cross-industry B2B e-commerce and B2C e-commerce Analytics.
Solutions Builder Express was launched earlier this year with a focus on six areas business integration, business intelligence, content management, e-commerce, infrastructure and portal/workplace in the following industries: electronics, banking, retail, financial markets, automotive, insurance, wholesale, consumer packaged foods.
Matching the technology, products and services to how a small business operates is the key to success, Hooper said. "We think there's value in the IBM brand. However, SMBs also demand industry expertise. It's like if you went into Sears to buy a refrigerator for your kitchen and the salesman showed you five that are the same kind as Emeril [Lagasse] uses in his restaurants." While the technology may be impressive, it's not appropriate for what you need to do, Hooper said.
"Just because you are successful selling to restaurants doesn't mean you can walk in and sell to an auto dealer. The underlying technology may be similar, but they need to be able to tell the customer 'we have done this for three other auto dealerships,' " Hooper said.
The Role of Technology for SMBs
It's becoming clear that large enterprises and SMBs see technology as playing different roles. While Fortune 1000 firms may see their IT strategies as a competitive advantage, smaller companies just want to add technologies that allow them to focus on what they do best. "They see it as leveling the playing field so they can compete based on their core strengths. They are comfortable competing that way," Hooper said.
"They are very savvy, Hooper continued, "many have a five-year plan, but they purchase only what they need at the moment. They roll out technology on an on-demand basis. It's our own damn fault for making software amenable to doing that."
As the economy recovers and big business start to buy big again, some industry watchers have questioned whether companies like IBM will move away from their SMB focus. Hooper doesn't think so. "People ask if this is a fad for IBM. SMBs are the growth area for IBM. We know we are strolling down the right path and have been for the last two years."
On a larger scale, IBM may be helping to add a small business axiom. Earlier this week, Microsoft announced Express versions of many of its developers' tools. A Microsoft spokesperson told Internetnews.com that new tools are designed to be "lightweight, inexpensive and easy to get up to speed with" characteristics that are certainly in line with IBM's Express lines.
While the word Express is a linchpin for IBM's SMB strategy, the company hardly lays claim to the term. "I think we found that something like 3,600 companies use Express," said Hooper, who added Microsoft's announcement reinforces Express as a moniker for making things easier. "If using the word Express makes it easier for SMBs to identify products, the more the merrier."
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