Size does matter – but not the way so many think…

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I am puzzled. This is not surprising in itself – I sit in front of a computer all week and let PR companies fire pointless emails at me declaring that their clients are unique, synergous, leveraging end to end solutions all over the shop and generally just being fab and groovy. With that in mind, it’s no wonder I’m a tad fractious by the time Crossroads comes on the telly.

No, but what is particularly puzzling me is why so many software firms refuse to embrace the category of the SME. The Small and Medium Enterprise that is, the very life blood of UK Plc, and yet a branding that all too many companies lurch away from in apparent horror. It’s corporate arrogance of course. No applications company wants to be thought of as anything other than a competitor to SAP and capable of keeping Hasso Plattner awake at night.

So to that end their poor PR flacks are instructed to position them as serious pretenders to the SAP ERP throne when in actual fact there’s more chance of them winnin g the downhill slalom in Salt Lake City than posing any serious challenge in that direction. Believe me chaps, the good damen und herren in Walldorf are sleeping soundly and will continue to do so for quite some time to come.

I met three companies this week who tried to convince me that they were the SAPs of the 21st century. I could only look at them somewhat sadly, as all three had viable products and propositions which will be thrown away if they keep aiming at the wrong target. In the database wars of the 1990s, Sybase and Informix spent all their time launching attacks at Oracle in a bid to convince us that they could be number one when they should have been fighting each other in order to secure the number two slot.

There is something that the SAPs of this world cannot do well and that’s tackle the SME space. R3 is a huge proposition and there are a finite number of companies worldwide that can afford to implement such a mighty piece of software. On the other hand, there are thousands upon thousands of companies out there in the SME space which could do with some SAP-type applications. The applications vendors that are born of that space themselves are missing a serious trick if they don’t fill that gap themselves.

Come on guys – there’s money to be made out there. Hugely expensive hosted options from the likes of SAP and Oracle are not for everyone’s tastes. There are rich pickings there for the taking. Some vendors are starting to realise this. I2 is a case in point, where in the words of EMEA VP Phil Crawford the company has had to learn to stop hunting elephants and start chasing rabbits. Others either haven’t or can’t learn this lesson.

Celebrate the SME. Embrace that market. Make some money. And stop pretending you’re a German superstar – that way madness lies…

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22nd Feb 2002 17:34

Your editorial about vendors shying away from this segment is very much to the point. One reason for the situation is that apps for small users are usually the labour of small developers (remember Act! before Sales Logix?). The larger houses have not only the ability to develop elephant applications, but the need to justify their own investment in capacity by selling to 'Fortune 500'-s. Smaller developers do come up with original and useful solutions, but we never hear about them because, lacking the marketing muscle they remain within their local tiny markets.

I was in such position not long ago, developing with my little company DataMasters compact and flexible apps for the lower end of the segment ('for idiots' stuff happy with desktop power) in contrast with my previous experience working with Teradata. I was even chased by venture capitalists at the height of the Bubble (and turned away because I was only asking for 500k and refused their pressure to submit a bizplan for at least 10M). We reached the limits of our little market (no channel distribution whatsoever) and I gave up, sticking to consultancy and, even in that, joining a large(r) outfit. I know quite a few similar small firms with good solutions who don't even dream to market them globally or even nationwide.

But wait: watch out for what Bill (Gates) will announce in just a few days! There is only one vendor that can make (lots of) money from SME-s, and they are jumping the CRM bandwagon late, but with all their might. Keep an eye on Bill!

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By admin
22nd Feb 2002 20:06

I have been hearing about a Microsoft CRM solution for years. I guess I can wait a few more days. :) Please let us know when it is available. For most small business ACT! offers a much better solution than Outlook, but their is a huge potential for the right product in this market.

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By admin
22nd Feb 2002 20:06

I have been hearing about a Microsoft CRM solution for years. I guess I can wait a few more days. :) Please let us know when it is available. For most small business ACT! offers a much better solution than Outlook, but their is a huge potential for the right product in this market.

Thanks (0)