In-Depth
Microsoft's Small Business Specialist Designation: What's in It for You?
Plenty -- as long as you combine it with a solid strategy to overcome SMBs' inherent fear of investing in IT.
- By Joanna L. Krotz
- January 01, 2006
At a recent networking mixer for the Chamber of Commerce in San Antonio,
Texas, John Hill, head of a local consulting and systems integration company,
got to chatting with Joe Pena, a branch vice president for an area bank.
Pena explained that his clients were mostly entrepreneurs, part of the
burgeoning small business community springing up on San Antonio's South
Side, where Toyota Motor Co. is building an $850 million manufacturing
plant. In response, Hill mentioned that he'd just qualified for the new
Microsoft Small Business Specialist (SBS) designation, which vets him
as an IT expert schooled in the needs of start-ups and smaller enterprises.
Pena was thrilled. "You're just what a lot of my banking clients
need," he said. The pair scheduled a follow-up meeting for a few
days later.
The upshot: "He's going to take me around and introduce me to his
clients," says Hill, whose company, Concepts for Creation Technology
Innovations LLC (CFCTI), is a Microsoft Certified Partner. "He's
got about 250 small-company clients that might benefit from using tech
services but don't know enough about what could help. Specifically, it
was the SBS designation with the Microsoft name that got Pena's attention."
As a result, business looks pretty good for Hill and CFCTI.
Maybe you're taking similar meetings. Nationwide, as sales and services
to large enterprises are noticeably slowing, the small and midsize business
(SMB) market is throwing off serious heat. The country's six million small
businesses now generate more than 75 percent of all new jobs, according
to the U.S. Small Business Administration. Competitive corporations such
as American Express Co. and MasterCard International Inc., Staples Inc.
and Office Depot Inc., as well as FedEx Kinkos and United Parcel Service
Inc. (UPS) are busy rewriting their rulebooks in order to win business
from SMBs.
And IT is benefiting as well. According to Cambridge, Mass.-based Forrester
Research Inc., SMB technology spending is expected to jump to $223 billion
by 2008, up from $147 billion a couple of years ago.
Microsoft has taken notice. Last fall, in announcing the launch of Office
Small Business 2006, Bill Gates, the company's chairman and chief software
architect, summed up the company's approach this way: "We see small
business as something that's a big opportunity for us, that's something
you'll see us carry through in all the things that we do."
No kidding. Annual revenue to Microsoft from SMB customers in the United
States alone now tops a whopping $1 billion, according to Cindy Bates,
Microsoft general manager for U.S. Small Business.
"Last year, we saw double-digit growth in revenue from our core
small business products in the United States, and we've increased our
staff threefold in just two years," she says. Those numbers are even
more impressive when you consider that Microsoft defines the SMB market
more narrowly than most other businesses do. "A lot of companies,
an IBM or SAP, for instance, might consider a small business as one with
1,000 employees," says Bates. But for Microsoft, a small business
has no more than 50 employees. "It's an area that we feel Microsoft
is unique in serving," Bates says.
The considerable upside of targeting small businesses is that the vast
majority of those six million companies can't afford their own full-time,
on-staff IT managers. Instead, they rely on consultants. Forrester reports
that 43 percent of small U.S. businesses used IT consulting services in
2005. And, as you likely realize, every $1 of revenue in software represents
about $6 in related support services.
Meanwhile, Microsoft is putting its money where its mouth is. With a
ringing declaration that "small business is big business," the
company has lately staked out deeper and wider territory in the SMB market.
As part of that terrain, it has specifically developed the SBS designation
in order to motivate partners to join the company in mining this new vein
of targeted business. As enticement, Microsoft has filled the SBS toolbox
with product rebates, services, promotions and special training.
Defining an SBS -- and Why it's Worth Becoming
One
Of course, there's a downside. The SMB market remains a tough one
to touch and pitch. Typically, you've got just one decision-maker, and
that's a good thing. But just as typically, that key person is the business
owner -- and entrepreneurs are known to be notoriously stubborn, time-starved
personalities inclined to distrust or dismiss outside advice.
To its credit, Microsoft is working to meet the SMB challenge. The company
has conducted extensive R&D into the needs of small and midsize companies,
to the tune of $2 billion over the past few years. Using old-style surveys
and focus groups, as well as newfangled consumer anthropologists and field
interactions, Microsoft worked to get a handle on the market and learn
how to soothe SMB "pain points" (see "Slicing
and Dicing the Small Business Market").
"I was involved with the teams that developed the Small Business
Specialist designation for about 18 months, starting in 2004," says
Harry Brelsford, a Microsoft Certified Trainer (MCT) and CEO of SMB Nation
Inc., a training and consulting service for SMBs based in Bainbridge Island,
Wash. "The partners had been requesting something like this for a
while -- a way to have a meaningful relationship with Microsoft without
necessarily becoming certified. Part of the idea was to elevate sole practitioners
and Registered Partners to the status of a real affinity group."
Thousands of partners expressed interest in enhanced training for small
business consulting in the months leading up to the official SBS announcement,
says Microsoft's Bates.
Finally, in July 2005, the curtain went up during the annual Microsoft
Worldwide Partner Conference in Minneapolis, an event that attracted an
unprecedented 6,500 attendees.
"The Small Business Specialist Community was created to provide
easy access to software, training and resources to help partners meet
the needs of small business customers," Allison Watson, vice president
of Microsoft's Worldwide Partner Group & Worldwide Small Business Group,
said at the conference.
Not coincidentally, the SBS debut came hard on the heels of the June
release of Service Pack 1 for Microsoft's enormously successful Small
Business Server 2003, and mere weeks before the official launch of Microsoft
Small Business Accounting 2006, the new software destined to go mano a
mano with Intuit Inc.'s best-selling Quickbooks. Microsoft Office Small
Business 2006 has also just come to market.
Slicing
and Dicing the Small Business Market |
If you plan on moving into the small business space,
beware of the biggest myth about this market: that all
small businesses are pretty much the same.
"Doctor's offices and dry cleaners are both part
of the small business market, but they don't buy technology
the same way," notes Joe Wilcox, a senior analyst
at New York-based JupiterResearch. In fact, you're likely
to find a wide variety of needs and approaches even
among SMBs in the same industry.
However, a study conducted for Microsoft by AMI-Partners
Inc., a New York-based SMB research and consulting firm,
identified four main types of technology users among
U.S. small businesses. They are:
Innovators: This largest segment includes companies
that usually have server systems. They're hardly early
adopters, but they realize that technology can make
them more competitive. "On average, the innovators
are growing 14 percent annually, compared to about 6
percent for all small businesses,"says Arjun Mehra,
an AMI-Partners research analyst. This group is your
prime small business prospect.
Pragmatists: A cautious lot, the companies in
this segment can be summed up in two words: "Show
me." They tend toward peer-to-peer systems and
require clear evidence of ROI before doing any IT spending.
This is your next-best segment to pitch.
Minimalists: These are the laggards. They'll
get by on whatever's around and, typically, are not
likely prospects.
Integrators: These are your cutting-edge, can't-get-enough
technology mavens. They're fast adopters, but account
for only 15 percent or so of the total market, according
to Mehra. So not only are they few and far between,
they're likely already ahead of the curve.
-- Joanna L. Krotz
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Awkwardly dubbed "a competency-like designation," SBS is a
hybrid in the partner pantheon, a cross between a competency rating and
a certification. It requires two tests. The technical exam is based on
a stripped-down version of the MCSE certification. You must also pass
something called the "Small Business Sales and Marketing Assessment."
A multiple-choice exam that can be taken online, the assessment takes
you through a series of small business operations and growth scenarios,
asking how you'd approach solutions. It specifically tests which Microsoft
products you'd harness to satisfy the stated goals of a business owner.
Essentially, as you work through the questions, you reach the conclusion
that one-size design is never the right answer. You can't implement scaled-down
enterprise solutions to manage the IT needs of small companies. "The
SBS certification focuses on consulting with the small business owner
and recommending the correct type of solution based on their existing
technology," says Andrew Abrams, president and CEO of ABA Consulting
LLC in Glendale, Wisc., an IT consulting service.
Abrams, who mostly works with small retailers, earned his SBS designation
in September 2005, after undergoing training at the annual SMB Nation
conference in Redmond. ÒI think I was the third or fourth Small Business
Specialist," he says. (The SMB Nation training is now collected in
a "fast-cram" $40 book, Microsoft
Small Business Specialist Primer, co-authored by Brelsford.) Back
home, Abrams displayed the new Microsoft SBS logo on his Web site and
marketing materials, and he noticed an immediate impact.
"It's given me credibility," he says. "When calling on
potential customers, it's helped me to differentiate my consulting practice
from other midlevel-to-enterprise consultants, which has already allowed
me to double my sales. The small business client wants to work with one
person directly on their technology needs." Abrams is further forecasting
a hefty 50 percent bump in his business over the next year, fueled largely
by the SBS designation -- based on the response I've received from small
business owners who now use, or are moving to use, Small Business Server."
Overall, Microsoft is touting SBS as a lucrative channel for Registered
Partners, which make up the lion's share of the 300,000 U.S. partners,
and as standout branding for the Certified and Gold Certified Partners
that already serve small businesses. Microsoft expects to enroll 5,000
U.S. partners in the SBS program within the first few months of this year
and 20,000 worldwide within the next 18 months, Bates says.
Congratulations! You're an SBS! Now What?
With those aggressive targets, it's no wonder that as soon as you
qualify, Microsoft gets busy helping you make hay out of SBS. You can
use the new SBS logo on all advertising and branding materials. You can
subscribe to a customized SBS Action Pack to get targeted marketing materials
and offers.
"It's worth taking time to read through the guides in the Action
Pack," says IT consultant Beatrice Mulzer, an MCSE and MCT with a
law firm clientele in Melbourne, Fla. "There's a lot of useful information
to apply so you don't have to reinvent the wheel," says Mulzer, co-author
of the SMB Nation training book. "There are prepared press releases,
contracts for partners, marketing materials, PowerPoint presentations.
All you have to do is slap on a logo and mail it out."
To help drive business, your company is listed as an SBS expert in the
Microsoft Resource Directory and the Small Business Partner Finder, which
is promoted on the homepage of the Microsoft Small Business Center.
"We average one million unique users a month to the Small Business
Center," says Bates. "It's a significant number to take advantage
of." Additionally, there are a Partner Resource telephone line for
pre-sales technical assistance (800-426-9400; staffed 6:00 a.m. to 6:00
p.m. Pacific), a business-critical phone support line (staffed 24x7) and
exclusive access to training and webcasts about using Microsoft products
for small business.
There's also the newly formed Partner Community Manager network. Piloted
by Eric Ligman, Community Engagement Manager for Small Business, and based
in Redmond, this network has 14 regional managers around the country who
act as hands-on, on-call resources for SBS Partners. In San Antonio, for
instance, CFCTI's Hill regularly confers with Charles Ramirez, an Austin-based
Microsoft Community Manager who oversees a four-state region.
"I've asked him to come down to go with me into businesses I'm pitching,
which has been a big help," Hill says. He's also called Ramirez for
information about client licenses, promotions and the financial resources
behind certain Microsoft deals, such as the recently announced Single
SKU Solution for Small Businesses, which runs through March 2006 and offers
partners rebates of up to $10,000, depending on the number of licenses
sold.
Before putting the regional network into place, Ligman worked in the
Chicago area for two years, shaping the idea and fine-tuning how Microsoft
could best support SBS partners.
"Navigating Microsoft is hard," says Ligman. "There are
so many resources that you often don't know where or how to engage. The
Community Manager network helps the SBS Partner stand out and put skills
on the table." You can identify your region's manager on the SBS
Partner Web site.
While evaluating the benefits of SBS, don't overlook access to the new
fleet of Microsoft Across America trucks and vans. Having figured out
that small business owners won't often travel long distances to attend
conferences and seminars, Microsoft decided instead to bring the demo
to them. These slick mobile labs are each outfitted with five to 10 workstations
that showcase customized solutions and software designed for SMBs. Partners
can team with Microsoft Across America for appearances at trade shows
or one of the dozens of Microsoft Connections small business seminars
nationwide. Your regional Partner Community Manager can help you arrange
using the vans for the occasional individual appearance.
Adding to the SBS arsenal is the fact that Microsoft is putting muscle
and thought behind its widely publicized Accounting 2006 launch, making
sure the new software is Office-intuitive and SMB-friendly.
"Software needs to come in and get to work right away," Gates
said in September, talking about meeting the needs of SMBs at the launch
of Microsoft Office Small Business 2006. "There isn't a specialist
who wants to spend his time reading a 500-page manual about that particular
product and thinking through how they're going to connect all the different
pieces together." Most small businesses rely on Microsoft Excel and
Word to track finances and cash flow, says Bates, referring to Microsoft
research. Less than half of all small companies use any accounting software
at all. By integrating Accounting into Office, the company is banking
on the small business comfort factor with Office to sell the accounting
application.
Clearly, Microsoft is putting down roots in the small business arena
and anticipating growth. While the initiative is still in its early days,
many partners say that, so far, they're finding both merit and support
in the SBS program.
"I see a great need out there for people to delve into the business
aspect of solutions and not just the technical angle," says Chris
Fraser, business consulting manager at Cherry, Bekaert & Holland, a Richmond,
Va.-based small business tax and accounting consulting firm with some
20 offices throughout the Southeast. Both a Certified Public Accountant
and Certified Information Technology Professional, Fraser still decided
to earn an SBS shortly after it was announced. He believes his new label
will boost his company's business. "Clients depend on me to educate
them about what they need," says Fraser. "I'm more of a partner
than a technician."
And that's exactly why Microsoft created the new SBS designation.
More Information
Small Business Specialist Resources
About the Author
Joanna L. Krotz writes about marketing, philanthropy, technology and management issues. She has just published "The Guide to Intelligent Giving," is co-author of the "Microsoft Small Business Kit" and founder of Muse2Muse Productions, a New York custom content provider.