SMB Market Heats Up

"The SMB market is hot!" We've heard it time and time again during the past year. We know from countless surveys and conversations that the channel is seeing its SMB sales increase at a faster rate than enterprise sales. And we know that many leading manufacturers have repositioned themselves with new products, programs and strategies around the SMB market.

That said, it doesn't explain why solution providers are doing more business with small and midsize businesses. It certainly isn't because business owners across America have suddenly found themselves awash with cash and have decided to embark on massive IT shopping sprees.

So, what's really driving the shift in the SMB market? VARBusiness asked John DiLullo, vice president of worldwide distribution at Cisco Systems, who has been intimately involved in the networking giant's enhanced SMB play.

"There has been a perfect storm, so to speak, in the SMB market that has created a demographic shift," DiLullo says.

From Cisco's perspective, there are three primary factors. First, broadband access has become cheaper and more available for smaller businesses below the enterprise market in recent years. Second, as broadband adoption has increased, so has the importance of network reliability and uptime; whereas, a few years ago, smaller companies could afford to stick with molasses-paced and failure-prone dial-up service, today they require the same speed and stability as many enterprises.

And, finally, DiLullo says that while companies have become smaller in head count, their IT infrastructures instead have become bigger.

"It adds up to the fact that SMB IT requirements are bigger today," DiLullo says, "and their infrastructures and systems are much more advanced."