NEW OPPORTUNITIES TO SELL
technology solutions to SMBs exist, but channel partners and their suppliers must do their homework if they expect to profit in a market that is both lucrative and challenging at the same time. The road to SMB market success, as it were, is full of potholes. Avoiding them is the key.
The good news is SMBs (companies with fewer than 500 employees) have aggressive plans for making new technology purchases over the next 12 months, according to the results of a new survey conducted by the Computing Technology Industry Association (CompTIA).
CompTIA commissioned research firm IDC to conduct the Web-based survey. More than 350 individuals involved in purchasing communications systems for companies in North America with 20-500 employees were questioned.
Nearly 30 percent of the SMBs surveyed said they plan to make significant investments in phone systems upgrades during the coming 12 months. Respondents that currently have separate voice and data networks indicated even more interest in upgrading their phone systems.
More than 28 percent of SMBs surveyed are planning significant investments in data network upgrades. Laptop upgrades are planned by 43 percent and wireless LAN deployments by 33 percent. Mobile wireless data services and applications (27 percent) and voice mail/e-mail integration (26 percent) are also high on the respondents shopping lists.
The good news for the reseller community is that among SMBs that rely on resellers and solutions providers for technology purchases, the large majority like what resellers are doing. Close to 80 percent believe that resellers have the skills and capabilities to provide the converged solutions they need; and 84 percent trust reseller recommendations for communication solutions, even when the recommended vendor is unfamiliar.
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SMBs express little interest in outsourcing their communications systems. More than half (53 percent) of all respondents said they intend to own/lease and maintain all of their systems when they make their next major communication system upgrade. Another 38 percent want to own/lease the equipment, but will consider contract with another party to manage the system. Just 9 percent of the SMBs said they are interested in hosted communications services or other outsourcing options. Among specific personnel, two-thirds of IT personnel surveyed prefer to own and manage their next solutions, while business-side personnel were more willing to outsource.
SMBs constitute an important market for converged voice and data networks and applications, especially for resellers. Just 17 percent of the respondents to the study have already combined voice and data traffic onto a single network, leaving a sizeable opportunity for selling converged solutions.
Pothole No. 1.
Security concerns present a significant obstacle that may have to be overcome to sell converged solutions to SMB customers. The CompTIA/IDC survey found that more than one-third of respondents had suffered an attack on their computer networks and/or phone systems during the previous 12 months. Among companies with 250-500 employees, close to 50 percent had experienced such an attack.
SMBs are skeptical about the security of current IP telephony systems. When asked if they trust the security offered by vendors in four different technologies, IP telephony received an affirmative answer from just 50 percent of respondents. That figure lags behind traditional digital telephones (82 percent), Ethernet data networks (72 percent) and wireless LAN (60 percent).
Pothole No. 2.
Among SMBs that already have deployed some level of IP telephony in their organizations, nearly 25 percent reported no significant difficulties with the deployment. For those organizations that said they had experienced problems, the three most frequently mentioned culprits were underestimating the costs of network upgrades; the poor quality voice services; and underestimating the difficulty of integrating applications. In many instances, it is likely that these problems could have been minimized or perhaps even eliminated if network readiness issues were addressed up front.
Close to 30 percent of respondents believe their networks are ready to support converged communications today; while 42 percent say their networks would require only a small upgrade to one or two devices. However, when asked how they knew their networks would be able to support converged communications, 71 percent of respondents admitted it was a best guess.
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Business-side personnel were more skeptical than their IT counterparts about the readiness of their networks for convergence. More than twice as many business respondents as IT respondents felt a major network upgrade would be needed to support converged communications. However, less than one-third said that a formal assessment of their networks ability to support converged communications had been done.
When it comes to readiness for IP telephony, all networks are not created equal. The customer needs to understand up front what challenges they will face. This information needs to be communicated clearly to the customer early in the process before the sale is made, the budget is set and the deployment begins.
Pothole No. 3.
The difference in opinion between business and IT personnel is not limited to the network readiness discussion, which probably comes as no surprise. After all, the saying goes, Where you stand depends on where you sit. SMBs are structured to buy converged communications solutions since the buying decisions for both voice and data communications are made predominantly by the same person, by individuals on the same team or by small cross-functional teams, typically representing business line, finance and IT.
In the CompTIA/IDC survey, one individual was responsible for the phone system and data networks in 29 percent of the cases. In another 43 percent of the cases, the responsibilities were held by people in the same department. In close to half the companies, three-to-four people are involved in making the decision to upgrade or purchase new communications systems. In a further 25 percent, the decision involved five-to-six people. The larger the organization, the more individuals are involved. Resellers should expect to make at least three sales pitches: to business, IT and finance. They should also be careful to respect the sanctity of the team.
John A. Venator is president and CEO of CompTIA, a global trade association of 20,000 member companies in information technology and communications.