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Friday, December 14, 2007

Tech Vendors Target the SMB 2.0 Segment

Research from IDC points to a group of small and mid-sized companies, "SMB 2.0" firms, as critical prospects for technology companies. This group accounts for 17 percent of all SMBs in terms of company counts, but nearly 30 percent of all SMB IT spending.

When combined with a similar group -- the "SMB 1.5 Fast Followers" -- the two groups represent over 60 percent of all SMB technology spending. These firms will continue to be successful, and that success will translate into above average increases in IT and networking procurement per company.

SMB 2.0 firms are not just the "technology heat seekers," who will buy anything, but rather they are the most advanced in leveraging to their benefit the kinds of advantages that business technology can provide.

They feel strongly that advanced technology is a competitive tool and that the Internet has transformed the way they do business internally. They make above average investments on technology to expand business as well as to manage costs. SMB 2.0s represent the future of what companies will increasingly look like, both in the United States and on a global level.

"Even more important than the near term appeal of the SMB 2.0 and SMB 1.5 Fast Follower clusters as high-rolling customers in the fast-growing SMB segment, are the directions in which they will lead technology providers," said Merle Sandler, research manager for the SMB programs at IDC.

The products and services these clusters will seek in the next 6-12 months are precisely those that other SMB clusters (especially the Skeptics and Middle of the Roaders) will be looking for in the next 2-3 years.

IDC's study entitled "SMB Cluster Analysis: Targeting Key Market Segments Including SMB 2.0 Firms," presents a useful alternative to the traditional market segmentation of size or industry. The study groups U.S. SMBs into five relatively homogeneous clusters, based on attitudes toward technology investment and implementation.