I often debate with friends in the IT industry on the merits of chasing business in the SMB. Lots of friends agree that the growth in the SMB sector continues to be strong but they argue that re-designing existing products for SMB’s has proven to be less than a profitable venture. I disagree with the entire rationale for reasons that might not appear to be obvious.
The reason most ventures have been unprofitable has little to do with the market and more to do with the philosophy of 99.9% of companies who try to push down complexity to SMB’s with new packaging. SMB thrive on easy to use yet effective solutions for complex environments. Vendors who service that market with dedication are profitable. Those that just repackage complexity with a simple title end up failing and end up going back to the enterprise to sell.
When will the vendors learn?