All eyes on SMBs for PC and server market

Move over large enterprises, PC and server vendors are offering more goods and services to small and midsized businesses.

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In the SMB server and PC marketplace, CIOs now have something their much larger cohorts in enterprise IT have taken for granted: choices.

IT professionals at small and midsized businesses (SMBs) often find themselves in a bind of sorts when it comes to PCs and servers. While most SMB CIOs have many of the same needs in terms of reliability and support as their brethren at larger companies, it's no secret that few enjoy big-company levels of personnel or financial resources.

Vendors don't feel our pain. Just because we're not big doesn't mean we're not important.


Neil O'Brien


CTO

L & J.G. Stickley Inc.

Neil O'Brien, chief technology officer at Manlius, N.Y.-based furniture maker L. & J.G. Stickley Inc., succinctly summed up the predicament typical of SMBs. "We need to minimize staffing and resources, so we don't want to proliferate servers," he said. "We're looking to run on fewer boxes rather than more," a notion, O'Brien acknowledged, that runs counter to vendors' marketing plans. Yet he bristled at the idea that vendors take the SMB market for granted. "Vendors don't feel our pain," he said. "Just because we're not big doesn't mean we're not important."

Specifically, O'Brien is particularly concerned about mission-critical support for his company's server-based production systems. As he sees it, mission-critical for Stickley means nothing less than 24/7 support. Having spent much of his career at larger companies, O'Brien said server vendors in particular have been remiss in terms of the SMB market. "They just don't understand that mission-critical applies equally as well to SMBs as it does to enterprises," he said.

SMBs get noticed

However, the tendency among PC and server vendors to write off SMBs appears to be changing.

"HP and IBM among other big vendors are making a concerted effort in the SMB space," said Gordon Haff, a senior analyst at market researcher Illuminata Inc. in Nashua, N.H. In general terms, SMBs are looking to vendors to simplify their IT environments, according to Vince Gayman, director of HP's worldwide SMB program. "Our customers are telling us that technology is too complicated; they just want to plug and play," Gayman said.

As for the newfound attention, both Haff and Gayman said SMBs can thank the recent technology bust. "Back during the crash, spending didn't drop off as much in the SMB space as it did in the enterprise space," Haff said. Vendors, therefore, viewed the SMB market as a way to grow market share.

More choices

More attention from vendors means more choices. For SMBs, there are more options available, both in terms of PC and server technology as well as pricing. "Servers are getting a lot easier to manage and have been moving that way for the past few years," said Mark Margevicius, research director of client platforms at Stamford, Conn.-based Gartner Inc. "What you get for what you pay is pretty good," he said.

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That's certainly Mark Wachtmann's take on the market as well. Wachtmann is vice president of IT at GoDaddy.com Inc., a Scottsdale, Ariz.-based provider of e-commerce and Web hosting services. "The marketing is broadening to make technology more available to SMBs," Wachtmann says. In Wachtmann's assessment, price points for higher- and lower-end servers, as well as PCs, have come down, making them more accessible to the typical SMB. A case in point: Dell has teamed up with Oracle to offer a database server-based system to SMBs that has the same source code as Oracle's database for enterprises. Scaled down to the specific needs of SMBs, the system costs $2,000, compared with a price tag of $1 million for the enterprise version.

Analysts say such a migration -- technologies formerly the exclusive domain of enterprises are increasingly accessible to SMBs -- is typical of the SMB marketplace. Technologies such as blade servers, network-attached storage and partitioned servers now are viable options for SMBs with limited resources and budgets. "There are new computer architectures out there, like blades for example, that SMBs may not have thought of before," Haff said. And the financial barriers aren't the only impediments that are disappearing. According to Gartner's Margevicius, tools for managing servers are much easier to use than ever before, enabling SMBs to handle all aspects of administration without the need for a dedicated IT staff.

For O'Brien, the changes in the SMB marketplace are welcome news, if only because he now has more options to shop around for a vendor that offers the kind of support worthy of a small, yet bustling manufacturing company. At the moment, O'Brien is evaluating the Power 5 server from IBM, with the idea of consolidating applications on a partitioned box. Currently, Stickley relies on a pair of clustered servers on a storage area network, an environment that has built-in redundancy, but without the level of support Stickley requires. So O'Brien is shopping around for a better deal.


Megan Santosus is a contributing writer based in Needham, Mass.


This was first published in June 2005

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