Once upon a time, SMB customers ran their businesses on little more than the IT equivalent of duct tape and bailing wire. Today, however, they are more likely to lightweight mirror larger enterprises in software adoption trends. (Tech marketers, you might want to set aside some time to review your SMB market value propositions.)

In a Forrester report titled Demand Insights: The SMB Software Market 2011Tim Harmon
(with Peter Burris and Eric Hsieh) attributes credit for the step in the enterprise direction to:

  • The "Millennialization" of SMBs: Once you manage to get over the stink of a soon-to-be-over-hyped term, know this: SMBs are employing younger workers. Being born in the digital age means you know tech trends like the back of your hand, and that certainly has a significant influence on how SMBs adopt and utilize modern tools.
  • The “Enterprization” of SMBs: On the flip side, Forrester says a large number of small businesses founded in the last five years have been started by seasoned enterprise executives, and they're employing their experience to this market at a higher level than ever before.
  • New Duds: Modern software packaging, pricing, and delivery models puts inexpensive software alternatives within reach of SMB technology budgets. Competition in tech markets has intensified as a result, serving SMBs an extensive array of product, channel, and service options.

The Race Forward

Considering the above, one would probably assume growth in the SMB market is booming; however, current economic recovery efforts are being stifled by tight credit markets. Consequently, SMB software budget outlooks are similar to those of enterprises, rather than poised to outpace. 

Forrester says SMB teams seem to be in good spirits, however, and continue to exhibit behaviors normally associated with good economic times, such as placing modernizing and upgrading applications at the top of their list of priorities.

With such a positive outlook on the present and future, the number of up and coming opportunities for tech marketers to flex their game is growing. Forrester specifically predicts new or heightened interest in three categories: 

Content Management

Goold ol' content management tops this group's list of interests. Numerically speaking, Forrester says 69% of small businesses are interested in adopting content management software, which is up from last year's 56%. 

Business Intelligence

Interest levels among both SBs and MBs remain high, although SBs have tempered their business intelligence investments to focus on marketing and customer-facing tools, which spells an opportunity for marketing/customer analytic applications. MBs, the largest company-size market segment for BI, remain strong in terms of their BI adoption plans (see Figure 11).

UC and Conferencing Software

SMBs are still careful with their money, and this is reflected in their UC and conferencing investments. 

"From a fiscal point of view, for SBs with limited ICT resources, it is much more cost-effective to administer and support a unified/consolidated solution, i.e., one videoconferencing room instead of dozens of implementations of desktop conferencing on individual devices," writes Harmon. "MBs are high on conferencing technologies across the board — UC, webconferencing, desktop  videoconferencing, and room-based videoconferencing — although they are the reverse of SBs in their inclination to desktop conferencing over room-based videoconferencing because of their larger and more distributed staffs."

What it Means

What it boils down to is SMBs expanding into an area of software that they previously thought to be out of their league. And considering the positive attitude and healthy appetite for these solutions despite an ongoing economic crisis, we can only assume that a much broader range of tools will be needed as conditions improve. 

In other words, while today sees a small number of tech vendors that can be considered to have successfully cracked the SMB market, the next couple of years are highly likely to yield a much broader range. Yes, a battle for brand supremacy is a-coming. 

With more sharks finding their way into the pool, tech marketers targeting the SMB market will have to seriously augment their marketing tactics and innovate on their go-to-market model. If this category includes you, tell us how you're preparing.