The Elusive -- and Desirable -- SMB

Small businesses are the growth engine of the U.S. economy. The stats tell the story: According to the most recent data available (2004), the U.S. boasted 24.7 million small businesses. Small firms with less than 500 employees make up more than 99 percent of the total number of all firms; there are 17,000 large businesses in all. It's little wonder why large firms covet the small to midsize business as a customer.

In general, however, that longing for SMB customers goes unrequited. Behemoth companies start their courting strong, promising their little friends support, money and assistance. But within no time, the initiative is put on the back burner, and the SMB customer is left in the cold. It's not hard to see why SMBs are skeptical of tbe big guys' overtures, particularly of large vendors.

And that's why Xerox has seemingly scored such a coup with its announcement today that it will acquire an integrator that has made a name for itself catering to its exclusively SMB clientele. Global Imaging Systems focuses on its customers through 21 regional core companies in the U.S. that sell and service document management systems such as printers, copiers and multifunction devices; network integration services; and electronic presentation systems. The Tampa, Fla.,-based integrator serves nearly 200,000 U.S. customers and reports more than $1 billion in annual sales. Global doesn't carry Xerox product, not yet. But it does have what Xerox doesn't: Reach into thousands of SMBs, where it can spec and recommend product.

"Large companies have a tendency to look at the market nationally in scope. What they need to deploy on large scale fights against what is needed locally," says Jim Firestone, president of Xerox, North America. "Global is locally relevant." Such local relevance is not descriptive of most large companies. SMBs perceive them as being staid and out of touch. Conversely, SMBs perceive themselves as entrepreneurial and flexible.

As a result of the deal, Global will, over time, add the full range of Xerox office and production products and supplies, including all Phaser and WorkCentre printers and multifunction systems that print, copy, fax and scan, as well as Xerox Nuvera and DocuColor digital presses. Xerox will reap the rewards of a seasoned VAR player in the SMB market.

"Everything about small business is local: local culture, local biz, lots of touch," notes Tom Johnson, chairman and CEO of Global Imaging Systems, who founded the company in 1994. "The people we deal with wear many hats, they need products and services to be responsive and productive. We deliver products tomorrow or next day. We have them up and working the next day. It's all about being local and not nationally focused. The big guys can't do that."

Well, maybe now they can.