News

Geek Power Fuels Growth

Survey: 'IT literacy' helps small companies become midsize ones.

• By Lee Pender
• October 01, 2007

Many partners, vendors and analysts believe that a new pot of revenue gold lies at the end of the SMB rainbow now thanks to the saturation of the enterprise market. But SMB is anything but a homogenous category, with plenty of disagreement over what "small" and "midsize" mean.

With that stratification in mind, CDW Corp., a large account reseller based in Vernon Hills, Ill., recently completed a study on how small businesses grow to be midsize-with CDW defining the latter term as involving companies of 100 or more employees-and what role IT plays in the growth process. Its findings may be useful to partners that are targeting SMBs.

First, CDW found that owners of successful start-ups in a variety of industries consider IT a top priority. Among owners of companies that had grown to 100-plus employees, 74 percent said that they were "totally involved in IT decisions" and 42 percent said that they handled IT themselves, with no dedicated IT staff. However, the survey indicated, companies with dedicated IT personnel were likely to grow faster than those without.

Fully 65 percent of business owners agreed or strongly agreed that their IT strategies were critical in their companies growing beyond 100 employees, and 22 percent of owners went as far as to identify themselves as "total geeks." Respondents in the "geek" category saw their companies grow, for the most part, faster than those whose owners were less interested in IT.

"One of the most compelling findings is that IT literacy is a strong factor [for growth]," Lauren McCadney, senior segment manager for small business at CDW, says. "Those folks who self-identify as IT geeks or power users, their businesses really were growing much better."

But apparently even the geeks need help, as 65 percent of owners said that they employed some type of consultant or outside IT help, signaling demand for consultants and other channel players. But what do those owners want from channel partners?

Microsoft's Small Business Specialist Community Established in July 2005, Microsoft's Small Business Specialist Community is a "competency-like designation" for partners serving the small business segment.

CDW found that the biggest regrets among owners surveyed were that they hadn't taken advantage of the technologies they had acquired (21 percent) or that they hadn't integrated technology strategically into their business plans soon enough (18 percent). So, McCadney says, partners should approach SMB owners with plans for strategic IT investment early and often, and they should emphasize that IT is a factor that can make or break a small business.

"No. 1, if they're working directly with business owners, is to get that business owner to slow down and realize that it's not a matter of, 'Can we afford to do this?'" McCadney says. "It's 'Can we afford not to?'"

And partners shouldn't abandon customers once a system is installed, CDW says. Instead, they should guide their clients through the process of getting the new technology to work.

Bottom line: The more a small business knows about IT, the better its chances for rapid growth. And that's good news for partners who know how to get that message across.

The full survey, titled "Business Rearview Mirror Study," is available at www.cdw.com.