One-Size-Fits-All Strategies Will Miss The Mark In Serving Critical SMB VARs

The last two weeks have seen a lot of misses.

Symantec, an industry bellwether, reported a fiscal second-quarter loss early this month, which it in part blamed on a hefty charge resulting from the Veritas purchase. But the company also said it expects to be below analysts&' earnings expectations for the current quarter.

Dell, that big bad direct engine, missed its mark for the second straight quarter when it reported third-quarter results last week. Its net income fell a whopping 28 percent, but Dell executives indicated they are still comfortable with its projected 10 percent growth rate moving forward. Still, Dell&'s push to attack Hewlett-Packard in the printer business has not shown itself to be profitable, despite growth in printer hardware and consumables.

Novell has given us a steady stream of bad news as of late, including the exit of its channel chief, Mark Hardardt, the resignation of SUSE Linux founder Hubert Mantel, and the planned layoff of 600 workers, while it also tries to sell off its Celerant Consulting business.

Cisco had a more upbeat announcement last week, even if it reported a dip in earnings for its first fiscal quarter, which it blamed on costs related to expensing of stock options. John Chambers, Cisco&'s president and CEO, was positive in his comments about sales growth in the United States and in Asia Pacific markets.

In contrast with the high-tech bellwethers, solution providers see steady, but certainly not easy, business in the market.

The channel, while it services all facets of the market, is particularly strong in small and midsize businesses. Unless you have been living under a rock the last four years, it has become clear that there is more growth in the SMB market than in the enterprise. Some market analysts are predicting that by 2007, SMBs will be spending more on IT than enterprise accounts.

I believe most large vendors are still organized for the enterprise business and haven&'t yet come to the realization that they need to approach smaller customer prospects differently.

Many vendors still approach channel programs, marketing programs, advertising and branding initiatives in a universal manner. None of them will admit this. They believe they do, in fact, have a “different approach” for the SMB market. I can guarantee that more than a few of them reading this column will dispute my generalization, at least as it pertains to them.

But in reality, far too many vendors haven&'t caught on to the influence of the VAR in these accounts.

Vendors still believe that it&'s all about lead generation and handing over prospects to the channel. They believe that, of course, because many of you ask for those leads and then later complain about how bad they are.

There&'s a fundamental switch that needs to occur in this business over the next two years. It will happen. It&'s just a question of how much pain will be felt before it does.

If Forrester Research is correct, and small and midsize businesses spend more than enterprises by 2007, then the marketing, branding and go-to-market strategies of all vendors must begin to focus on influencing the VAR to push the manufacturers&' products and services as part of a larger solution.

Most manufacturers can&'t come to grips with the thought of a VAR having a bigger say in the product selection process than they do, especially in the SMB space. So they keep pushing at this market in the same manner they do in the enterprise. All I can say is good luck to that, and happy earnings season.

Make something happen. I can be reached at (781) 839-1202 or via e-mail at [email protected].