Small businesses are incubators for creative ideas and new market models. They are frequently trailblazers within their own industries, and view technology as a tool that helps them compete and achieve better bottom line results.
More than any other business sector, small companies understand they need to concentrate on running their business, not on their technology, if they want to be creative and competitive. They demand technology that solves a business problem, rather than adds bells and whistles. Therefore they are significant drivers of change and innovation within the high-tech industry itself.
They have the market clout of critical mass, if not individual size, because small business comprises the majority of businesses in the U.S. and Europe. At the same time, the rapid growth in emerging markets, such as China, India, and Brazil, is being fueled by the small business sector.
As a result, the high-tech industry is more in tune with the needs of small business than ever before and is making substantive changes in its own business strategies to respond to the needs of this major market segment. In the past, many technology vendors focused almost exclusively on price and size when selling to the small business market and tended to offer scaled-down versions of products sold to large enterprises. Now they understand that smaller businesses are much more interested in technology that is easy to install, use and manage.
Today technology is being designed specifically for the small business market. These products and services use open computing standards to help ease the ability to connect and exchange information with partners, suppliers, and customers. As a result, they help facilitate the extended relationships that are the lifeblood of any small business. Working well with others is how small businesses get better at what they do and make the innovations needed to stay at the top of their game. At the same time, technology for small business is most effective when it is tailored for a specific industry, able to scale with business growth and easy to use from day one.
The requirement for technology to be immediately usable has created one of the hottest trends in the industry today: Software-as-a-service. This new computing model initially caught on with small business, but is now gaining traction at all levels of the market, a phenomenon that is not unusual. Frequently innovations in technology start within the small business market and trickle up to benefit larger businesses as well.
Software-as-a-service is an Internet delivery model, which eliminates the need to buy, manage, or maintain the software applications used in running a business. Instead, companies pay a subscription fee based on usage, avoid licensing fees and the need for upgrades that are often time-consuming and disruptive to normal business. Instead, the technology vendor does the lion’s share of the work, which lightens the business owner’s workload and commitment of resources, things that are always major concerns for a smaller company.
The less time you spend worrying about technology, the more time you can spend with customers, on sales and marketing and new product development, and in the other areas that bring in revenue and profits. Just as important, a technology services model reduces operating costs, lowers expenses and increases profits.
One word of caution to small businesses that are wondering if the service approach, with all its advantages, is the really right choice: Be certain that the vendor you select can deliver the level of service you want 24/7, has the technical expertise to take on your specific needs, and provides the security and data center reliability your business requires. That’s because the bottom line for all the technology you use in your business is that its chief function is to help you operate more effectively, more competitively and more profitably, which is good sense for every business, large and small.
Buell Duncan is general manager of the IBM ISV and Developer Relations, Software Group. He is responsible for IBM’s worldwide relationship with independent software vendors (ISVs) and corporate developers, a strategic growth initiative in which IBM partners rather than competes with developers of business application software. He was named to his position in January, 2003.