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IBM, Cisco, Oracle, EMC, Microsoft, HP, Intel and other big companies are chasing small and medium businesses with diverse product offerings. According to market research firm Access Markets International, there are over 7 million SMBs in India. Their IT penetration is relatively low; less than 2 per cent of their turnover. Analysts suggest their information solution needs are growing at 150 per cent a year. The small and medium business (SMB) sector constitutes approximately 95 per cent of the total industrial units in India and is a substantial contributor to the country's GDP. Small enterprises constitute approximately 99.4 per cent of the country's SMB universe. At present, Indian SMBs provide employment to over 21 million people and more than one-third of the enterprises would have recruited an additional 3.4 million personnel by end-2005. Eyeing this huge market almost all the vendors are offering specially crafted solutions for this segment. Microsoft recently introduced Microsoft Dynamics as the platform for a suite of offerings for the SMB segment. Under this, it is offering financial management, supply chain management (SCM), and customer relationship management (CRM) solutions designed for SMBs. Microsoft Dynamics include applications and services for retailers, manufacturers, wholesale distributors and service companies doing business in the domestic circuit or in multiple countries. Microsoft is not the only one banking on
this emerging SMB segment. SAP beat it to market with SAP Business One, an
integrated software solution for small businesses. Oracle too is not far
behind. SMBs make up more than 80 per cent of Oracle's 25,000 plus
customer base in APAC. Though these products are fine-tuned to the Indian market, they need a strategy with regard to SMBs. Industry experts discloses some interesting strategies that companies have for SMBs. The first strategy is the pricing mechanism. As the level of customisation is need-based there is critical but little customisation and hence the price goes down. The second strategy is playing a volume
game where companies have a large chunk of customers-about 60 to 70
percent from the SMB segment-helping to reduce the price points. And the
third key strategy is micro-verticalisation of channels where partners
specialised in specific business segments like retail; automobile and
discrete manufacturing offer tailor-made products and services. For
instance, Cisco is focussing on the segment with its two-tier channel
primarily comprising registered or premier partners targeting SMB
customers. Business solutions companies are focussing on SMBs for the past three to four years. Now this trend seems to be maturing with increase in penetration of integrated and adaptable business solutions. According to a Frost & Sullivan research on revenue marketshare for the mid-market ERP applications, Microsoft was at number three in terms of the marketshare in 2004. However, its marketshare is growing in this segment. When targeting the SMBs a lot depends on the partners as these are the people who are constantly in touch with the customers. Microsoft is not taking any chances. Microsoft Dynamics solutions are delivered by an ecosystem of about 60 certified partners in India which include ISVs. These partners specialise in different industries and range from small, domestic consultants to multinational groups. They are known for providing local, personalised service, from planning and implementation, to customisation at a granular level with support and education. But then the others too are gearing up. For instance, SAP has signed Hewlett-Packard as its national distributor. Leveraging on HP's channel experience and using their vast channel infrastructure of solution implementers and partners in India, they will ensure that the SAP solution is available to SMBs spread across the country.
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