Monday, April 25, 2005

Software on demand: small companies still don't "get it"

Small and mid-size businesses (SMBs) should be a fertile market for software vendors such as NetSuite and, that sell software on-demand, that is systems hosted by the vendor and sold on a monthly subscription basis. However, a recent research report by AMI Partners indicates that adoption of software on-demand might take longer than on-demand vendors would like.

The study found that the typical small business averages less than one full-time IT headcount, while the average medium business has five full-time IT staff. So, SMBs ought be welcoming software on-demand as a way to deploy systems without increased need for IT staff. Furthermore, SMBs are growing in their use of the Internet, and most of them already have high-speed Internet connectivity. This means that they already have most, if not all of the infrastructure needed to implement software on-demand.

However, the study found that the majority of SMBs currently have no plans to adopt software on-demand. Why? The study points to a lack of awareness and education concerning software on-demand vendors and solutions.

In my opinion, software on-demand is the way of the future, especially for small and mid-sized businesses. But vendors are going to need to do a lot more marketing and education before adoption reaches a tipping point.

Related posts
Software on demand: attacking the cost structure of business systems


andrew said...

Education is only a part of this for SMB's. In this market you do not have people acquiring knowledge, evaluating it and then planning the next move for the company. Everyone in a small concern is running like hell to make ends meet, to make things happen. Ellison and others from the big end of town are expecting to sell to SMEs in the same way as a business that does a load of planning. We need to modify the way we sell. SMEs are a 'suck-it-and-see' mob - they don't have the time to do anything else. NetSuite in particular needs to come already pre-made for numbers of different businesses. SO there should be a Shoes Store Netsuite, a Chemical Supplier Netsuite -- each of them pre-made. SMEs are not going to spend on consultants and services to bend the software to their business. NetSuite needs to be already pre-made.

andrew said...

See more ideas on selling to small business on my site:

Andrew Spencers NetSuiteCompendium.