Not Just for Big Firms
Understanding the similarities and differences among four types
of businesses in the small and medium-sized business market will
help vendors better tailor solutions to meet the requirements
and needs of a fragmented SMB marketplace, according to research
A growing number of small and medium businesses (SMBs) are
waking up to the potential benefits of enterprise software that
would have been used previously only by much larger
organizations, according to new research.
A study from research house AMI-Partners categorizes and
analyzes SMBs in four distinct tiers based on IT behavior:
adoption; needs and attitudes for customer targeting; product
positioning; and focused offerings.
Tier one is "enterprise adopters" which view IT solutions
similarly to large enterprise counterparts and drive the lion's
share of IT spending.
Tier two is "early adopters" which embrace new IT solutions to
optimize productivity, but lack the resources needed to deploy
Tier three is "value adopters" which implement IT solutions
after others have done so with a relentless focus on costs.
Tier four is "needs help adopters" which employ IT solutions
only at the threat of losing customers or suppliers.
"Tier one SMBs account for the smallest percentage of the
overall SMB universe," said Sau Lam, research analyst at
"But, in general, they outspend tier three and four SMBs on IT.
In the enterprise software arena, this gap is even more
For example, the study shows that tier one and two SMBs account
for almost three-quarters of spending on CRM Free Download -
Sage Software's 17 Rules of the Road for CRM. (customer
management) and ERP Latest News about enterprise resource
planning (enterprise resource planning) technology, while tier
one and two SMBs account for more than three-quarters of the CRM
and ERP investments in the SMB market.
"Enterprise solutions vendors must understand the different
needs and sophistication levels of these segments and craft
go-to-market strategies with products, marketing Email Marketing
Software - Free Demo, channels and pricing aligned to the needs
of each segment," said Lam.
Tier one SMBs make up just over 6 percent of the "universe," but
spend an average 10 times more on IT, and twice as much on CRM
(or ERP) solutions, as their tier four counterparts.
Other findings include tier one and two SMBs being more likely
to buy software directly from packaged software vendors, while
tier three and four SMBs are more likely to do so from regional
or national retail chains.
Understanding the similarities and differences among these four
segments of the SMB market will help vendors better tailor
solutions to meet the requirements and needs of a fragmented SMB
marketplace, according to AMI-Partners.
07/01/07 4:00 AM PT