September 1, 2014

IBM Gets Clearer on the SMB Market

IBM recasts its SMB message to refer to IBM has expanded its line of products and services for SMBs — “small and mid-sized businesses.”  And in the process, IBM has taken the opportunity to clarify its messaging for SMBs.

Why is messaging significant to you?  Bear with me and I’ll explain.

IBM recently introduced two new products that have been scaled from their larger enterprise versions to suit SMBs.

  • The IBM Rational Build Forge Express Edition provides a software delivery process management solution that enables small and mid-sized companies to standardize and automate end-to-end software release processes and better govern compliance implementation.
  • The IBM Tivoli Network Manager IP Entry Edition is a network management product that helps organizations visualize and understand the layout of networks in their environment, allowing them to scale and grow as market demands dictate.

It seems almost everybody’s definition of small business differs. IBM’s latest announcement focuses on larger businesses than you might typically think of as “small” businesses.

According to Michele Grieshaber, director channel strategy and SMB marketing for IBM’s Tivoli line, one group of customers that IBM targets falls roughly in the 100 to 1000 employee range. Another group is typically from 1,000 to 5,000 employees.

Hence, the designation “SMB” or small and mid-sized business. Or, as IBM is now calling them, “growing midmarket businesses” especially when referring to the larger end.  That’s actually a better designation I think, than small and mid-sized businesses, which can be misleading.

The SMB segment really is a different kettle of fish from a small business of say, 20 employees, because the emphasis is more on that “mid-sized” part of the definition. But the needs of SMBs differ from very large corporations, too, so you can’t really lump them in with enterprise customers. 

Caught in the middle!

The unfortunate part is that all too often I see the term “small business” used loosely to describe these larger mid-sized or midmarket businesses.  They may be smaller than your garden variety Fortune 1000 company, but they’re hardly “small.” The result is … confusion.

To address the differences, IBM has created two “sitelets” (sections of websites) to speak directly to these midmarket businesses, located at: www.ibm.com/tivoli/smb and www.ibm.com/rational/smb.

You also can see the definition being discussed even more precisely in this presentation for IBM partners (PDF) that I found on the Web.

IBM’s move to speak specifically to the midsized or midmarket customer is a step in the right direction.

In general, the small business and SMB marketplaces could use a lot more clarity — clarity as in what size business a particular solution may be best suited for. Otherwise vendors risk confusing their prospective customers.  And a confused prospect means a longer sales cycle.  One party may be thinking of a small business with eight people in it, while the other is imagining a business with 800 employees. Those two businesses will be light years apart, as measured by their needs, their budgets, and their internal level of IT expertise. There’s no sense in either side — prospect or vendor — wasting time on a solution that isn’t appropriate for the company needs.

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Anita Campbell - CEO


Anita Campbell Anita Campbell is the Founder and Publisher of Small Business Trends and has been following trends in small businesses since 2003. She is the owner of BizSugar, a social media site for small businesses, and also serves as CEO of TweakYourBiz.com.

8 Reactions

  1. Anita:

    This clearly is a problem. It seems to me some leading small business blogger (hint, hint, wink, wink) should propose a set of industry standard size definitions and work with others to have them become standards.

    Steve

  2. That’s an interesting thought, Steve. “Small” definitely is in the eye of the beholder.

    - Anita

  3. Microsoft has a similar program for small businesses and an even better program if you building small business building products on the Microsoft platform.

  4. IBM is a very large company and its main focus has always been large accounts. I am not sure how successful IBM could be in exploring the small business market. The small business market is much closer to the consumer market than the corporate market. As a result, I believe that Microsoft with it’s consumer brand name is much more likely to succeed in the small business arena than IBM.

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